Government Debt Help Scheme : Get Instant Help for Your Business

Government Help to Buy Scheme for Housing Benefits

Debt is an integral part of running your business. It automatically gets into your business when you want to grow or expand it. Often the problem occurs when you find difficulties to repay these debts. Thus, make arrangements for paying off debt on time. 

The government has developed some schemes to ease up the debt payment process for entrepreneurs. As per the Government Debt Help Scheme, you can easily repay your debts in installments. So, if you aren’t well aware of government Debt Relief  schemes, then get in touch with government scheme to help with national debt helpline number

Government debt help schemes and solutions

Gov debt help schemes include a  wide range of solutions and forms of insolvency introduced by the government. These include government debt relief scheme orders , individual voluntary arrangements (government IVA scheme), protected trust deeds and the Debt Arrangement Scheme (DAS).

Various Government Debt Help Schemes for You:

You can pay off your business debts by setting up the following plans: 

1. Debt Management Plan (DMP)

A Debt Management Plan comes into effect when you make an agreement with your creditors. It is an efficient government scheme to help out with debt. You can even choose a Debt Management Plan if it is possible to pay your creditors a small amount each month. Thus, it allows you to repay your debt within a few months instead of paying them at a time. 

You can even create a Debt Management Plan by coordinating with your creditors. If not, then hire a licensed debt management company to design a plan in exchange for a setup fee. In case you hire a debt management company, then you have to make regular payments. 

Some debt management companies charge for handling every payment that you make to your creditors. Moreover, the company will then share the money you are paying to the creditors. 

A Debt Management plan is a good option for paying unsecured debts. Unsecured debts are those which are not guaranteed against your property. You must ensure your repayments in order to restore the Debt Management Plan. 

2. Administration Order

If a country court or high court has given a judgment against you, then administration order is essential. Hence, you can avail of administration orders only when your debt is less than £5,000. According to these orders, make 1 payment a month to your local court if you are unable to pay in full. Then the court will be responsible for distributing the money among your creditors. 

This option is advantageous since creditors listed on administrative orders can’t take any action against you. If they want to take action, then they will require the court’s permission. Hence, you can apply for the administrator order by filling up the form N92. 

Next, the court will then scrutinize your form and decide whether you have to pay the full or a part of your debt. It will also determine your monthly payments and the time period for this arrangement. 

The composition order is the same as the administration order, only the name differs. As per the administration order, you need to pay the court fee at the time of each payment. The fee will be 10% of your debt amount. 

Eligibility

  • You can apply for administration order only when your debt is less than £5,000, including any interest and charges. 
  • You can then apply for an administration order with two creditors only. Only you have to provide the court with the details of your income. You can thereby ensure that you are capable of regular repayments. 
  • Finally, the country or local court has to give a written judgment that you can’t pay the full amount. 

Responsibilities

You must maintain your repayments or the concerned court will initiate the attachment of earnings order. This order states that your employer will deduct the remaining debt amount from your wage. If you feel, then you can cancel the arrangement at any time with the prior application. However, it won’t have any effects on the operation of your business. 

Public Records

Register of Judgments, Orders, and Fines will maintain the administration order of your business. This arrangement gets automatically dissolved after 6 years since your administration order was made. So, if you want a certificate of satisfaction, then write an application to the court and send a cheque for £15 to the Majesty’s Courts and Tribunal Service. 

3. Individual Voluntary Arrangement (IVA)

When you make an agreement with your creditors to pay the entire or a part of the debt, it is called IVA. When you make IVA, you agree to make correct payments to the concerned insolvency practitioner. This person, in turn, will divide the payment between your creditors. Unlike bankruptcy, IVA government scheme also allows you to exercise more control over your assets. 

Inform the insolvency practitioner about the amount that you can afford to repay. Also, state how long would you like to extend this Individual Voluntary Arrangement. Apart from this, specify the value of your assets, debts, income, and the name of respective creditors. Then the insolvency practitioner will contact your creditors and verify the amount you owe to them. 

Cost

The cost involved in government IVA scheme remains the same as the previous two methods. So, you have to pay a setup fee and a handling fee at the time of making each payment. Still, have a talk with your insolvency practitioner and ensure all payments. 

Conditions for IVA

The government IVA scheme  is enforceable if the creditors holding 75% of your debt accept it. In that case, the IVA government scheme will be applicable to other creditors who haven’t accepted it. 

Responsibilities

If you do not keep up your repayments, then the insolvency practitioner can cancel the IVA. If the situation demands, then he can make you bankrupt as well. However, you will be able to carry on with your business as before. 

Public Records

As your insolvency practitioner enforce the IVA, it gets added to the Individual Insolvency Register. The IVA debt help will be removed from the register three months after your IVA ends.  

4. Debt Relief Orders (DRO)

If you owe less than £20,000, then you can opt for debt relief orders. It is easy to apply for government Debt Relief scheme Orders if you don’t have much spare income and lack your own home. If you possess Debt Relief Orders, then your creditors will require the court’s permission to recover the debt. Moreover, you are free from your debt 12 months after making the government Debt Relief scheme. 

You can even obtain a DRO from the officer of a bankruptcy court. But, an authorized debt advisor is necessary to help you with the paperwork. 

Costs

£90 is the fee of the official receiver at the bankruptcy court. Your debt advisor will tell the time and process of paying the official receiver’s fee. Ask your debt adviser whether a charity can help you with the cost of DRO or not. 

Eligibility

  • You are eligible to apply for DRO if your debt is below £20,000. 
  • You must have less than £50 of spare income every month. 
  • The value of your assets must be less than  £1,000. 
  • Moreover, you must have lived or worked in England and Wales within the last 3 years. 
  • You cannot apply for a DRO if you have already applied for it in the last 6 years. 

Restrictions

If you have obtained a DRO, then you cannot borrow more than £500 without the lender’s permission. You cannot manage a business without informing your partners about the DRO. Even you cannot act as a director of the company as well. Finally, you will require the court’s permission to set up, manage, or promote a company. In case you wish to open a bank account, then inform the bank about your current DRO. 

DRO restrictions will last as per the time mentioned in the Individual Insolvency Register. However, the restrictions usually do not last for more than 12 months. Remember, that careless or dishonest behavior on your part might extend the time of DRO. The court will then ask you to agree to a Debt Relief Restrictions Undertaking for extending the time of DRO. If you do not agree, then the court itself will issue the Debt Relief Restrictions Order. 

Additional Information

  • If you are having a DRO, then you cannot avoid your rent and bills. 
  • You will have to pay debts like student loans, court fines, etc. 
  • The DRO will be longer valid if your financial condition improves. 
  • Noncooperation with the official receiver can also cancel your DRO. 
  • You can get a bankruptcy order if you obtain a new debt after your DRO approval. 
  • As your DRO gets approved, it is added to your Individual Insolvency Register. 
  • Your DRO will be removed from the Individual Insolvency Register 3 months after your DRO ends. 

These are the necessary information that one must know to avail of the government debt help scheme. Hence, make sure to choose the best scheme based on your requirements and financial status. 

Government Debt Help Frequently Asked Questions (FAQs)

Government debt help schemes are the debt solutions offered to the debt-ridden individuals by the UK Government. These debt help schemes consist of various insolvency debt forms to relieve the individuals from their debts. While some debt solutions are the formal agreement between the debtor (you) and the creditors, some are informal contracts.  Such debt help schemes offered by the Government include: Debt relief Orders (DRO) Debt Arrangement Schemes (DAS) Protected Trust Deeds Individual Voluntary Arrangements (IVAs) To learn more about the Government debt help schemes, you can seek impartial debt advice from the concerned authorities and debt experts. You can also get in touch with a trusted Government organization to get information about writing off your debts. 
The purpose of Government debt help schemes is to help individuals clear their debts. They do so by providing the debtors with multiple debt solutions to suit their needs. You can successfully write off or clear your debts by choosing the most appropriate insolvency solution as per your qualifications and circumstances.  However, be cautious about some debt management companies claiming to provide debt solutions under the prospect of Government debt help schemes. Such debt management companies tend to charge a service fee from the customer. Therefore, do proper research before entering into one. 
An Individual Voluntary Arrangement (IVA) is an insolvency debt form offered under the Government debt help scheme. When a debtor enters into an IVA, he agrees to make an affordable monthly repayment to the creditors for a set period, usually about four to five years. You can include all your unsecured debts in an IVA government scheme. At the end of the IVA agreement tenure, the creditor must write off any outstanding debt under your name.  Individuals residing in Northern Ireland, Wales, and England can use the Government IVA scheme. For more information on Individual Voluntary Arrangements, you can call for IVA advice. 
Individuals are often skeptical about whether an IVA is an official debt solution under the Government debt help scheme. They wonder about the legitimacy of an IVA as a formal debt solution. So, to clear your confusion, Yes, the Government debt help scheme offers an IVA as an insolvency solution.  Individuals who do not want to apply for bankruptcy can benefit from a Government IVA scheme to write off their debts. One of the vital reasons for the popularity of IVAs in the UK is that it protects the property and assets of the debtor from being sold off to raise debt money. The benefits of an IVA depend on the debtor’s circumstances, so make sure to get impartial IVA advice before applying for an IVA. 
You should seek Government debt help schemes only if you have more than one creditor at the moment. The responsible debt advisors will help you choose the right debt solution for you. Regardless, to know when you should clear off your debts, you might be struggling with the following: You receive multiple calls and letters from the creditors. You have extensive credit card repayments. Your credit cards and overdrafts bills are multiplying. You have excessive spending or expenditures. You cannot pay up even for your necessary household bills.  In short, if you feel that you are struggling to balance your finances and do ends meet, it is time that you look for suitable Government debt help schemes. 
Other than the Government IVA scheme, there are many different IVA service providers. If you think that entering into an IVA would be a good advantage in clearing your unsecured debts, you should carefully proceed with further procedures. Many IVA providers tend to charge their customers some upfront fees for the IVA service. Thus, what you should look for in an IVA company are: No upfront fees demand. Well-established company with experienced IVA experts. Estimate small monthly IVA contributions. High and quality reviews by their customers. Should have a solid online influence in regards to the IVA market.  You can request professional IVA advice to help determine your eligibility and financial requirements to find the best debt solution. 
Government debt help schemes usually are meant to write off your unsecured debts. So, you can include all your unsecured creditors in a debt agreement. However, different debt solutions have distinct advantages. So, consult with your debt advisor, and prioritize your debts. Suppose you have a lot of priority debts. And if you do not repay priority debts within a stipulated time, your home will be taken over by the respective authorities. Priority debts usually cover your mortgages, water bills, council tax, rent, gas, electricity, and other unpaid fines/bills. So, you see, if you do not pay off these debts first, the consequences would not be good. That’s why it is always advisable to get debt help from experts. 
Residents of Northern Ireland, Wales, and England can apply for Debt Relief Orders (DRO) under the Government debt help schemes. Your debt amount should not be more than 20,000 pounds to qualify for DRO. You can seek DRO if you have insufficient income sources and no personal property. The creditors cannot directly demand the debt money from you without prior permission from a court. That is the benefit that you get after obtaining a DRO. From the date that you are granted a DRO under the Government debt help scheme, you are debt-free for the next 12 months. To obtain a DRO certificate from a bankruptcy court, you would require an assistance of a professional debt advisor. 
Under the Government debt help scheme, a debtor (you) must qualify the following points to possess a Debt Relief Order (DRO): Your total debt must not be more than 20,000 pounds (15,000 pounds for Northern Ireland). If you own assets, the value must not exceed 1,000 pounds (300 pounds for Northern Ireland).   After deducting the necessary expenses, your disposable income per month must be less than 50 pounds. If you want to apply for a second Debt Relief Order (DRO), there should be a six years gap from your first DRO.  You have to be a resident or a working person in Wales and England for at least three years.  If you fulfill all these criteria, the Government will grant you a Debt Relief Order under the Debt Help scheme. 
In a Government IVA Scheme, other than the debtor and creditors, an Insolvency Practitioner (IP) is assigned to act on behalf of the debtor. The IP will be the debtor's representative for any financial matters and to deal with the creditors. Although being a formal agreement, the terms of an IVA is flexible enough, which may change concerning the debtor’s circumstances. The curation of an IVA proposal considers stuff like the debtor’s income and expenses, the total debt amount, third-party payments, etc. Vulnerable to change, an IVA comes to effect as the court approves it, granted that the creditors do not object to it. 
The IVA setup and processing is managed by the Insolvency Practitioner (IP) and is responsible for the IVA matters until it is over. The general IVA process involves: The IVA advisor or the IP will assess the debtor’s income and expenses. The IP will evaluate and determine a monthly IVA repayment amount to give the debtor enough spare money to live by.  The debtor must agree to pay up the evaluated monthly IVA contributions as long as the debt ends or the IVA term ends.  The IP reports the designed IVA proposal to the creditors meet and asks for their approval.  If the creditors' vote favors the IVA proposal goes more than 75%, the court will approve the IVA proposal.  The IP will monitor the payments and the debtor’s circumstances during the IVA tenure to ensure a violation-free arrangement.  The IP will hold an annual review until the IVA ends.  As the term of the IVA is complete, the creditor will write off any remaining debt of the debtor.  The debtor is now debt-free. 
The government debt help scheme provides various debt solutions to the debtors. So, it is fitting that debtors will get confused. A debt advisor helps the debtor by assessing their circumstances and debts and then preparing a budget plan. They will offer necessary debt advice regarding insolvency solutions and approach one. The debt advisor may even contact your creditors to discuss the debt repayment method and plan if you are fortunate.  While you get a debt advisor’s help, ensure that you provide all the information asked in the most detailed and accurate manner. Keep your documents and other paperwork handy.