Govt Debt Advice : Get Free Debt Advice and Solutions

Paying a debt can be rather a hectic task. Not only does it seize your time but also energy as you have to deal with creditors every now and then. To help you out from such situations, the UK government has come up with certain debt advice. 

These are genuine guidance for any easy debt repayment. To clear the concept for you, we will be discussing govt debt advice in detail so that you can get a clear insight into the subject.

What Options do we have to Pay Off your Debts?

There are numerous ways by which you should be able to manage the situations of owing money from your creditors. Here we have mentioned each of the plans recommended by the government for an easy management.

#1 Debt Management Plan

We face situations where we are unable to pay the money within the stated time and thus we require a plan. This may include paying little money each month or repayment of money within certain months to the creditors.

Now, this can either be executed by you or may require a professional’s assistance. There are numerous companies that can provide you with skillful individuals so that you can get a better management plan. 

Once you hire a company for a debt management plan, you will have to provide them your complete financial details. The company will then take the load of dealing with your creditors from here. They will contact them and discuss a management plan with them. After that, you will have to pay some money to the company each month (based on the discussion) and that will further be transferred to the creditors.  

However, there are certain things your creditor can still do. They can still ask you to pay the entire debt amount on any other date. Besides, they can also take any action if they want their money immediately. 

Furthermore, they can disagree with the management plan entirely. It is important to keep note that this debt management plan is valid for only unsecured debts.

#2 Administration Orders

If you have taken a debt of an amount less than 5,000 pounds and have any high court or county court judgment against you, then the government suggests you to, opt for Administration Orders.

In doing so, you will have to pay the debt money to the court and they will then transfer the money among the creditors. Besides, this will further keep the creditor away from taking any kind of action. Even if they want to, they will have to take permission from the court. 

For an Administration Order, you will have to fill out a form and then submit it to the court. The court will tell you the exact amount of debt that you have to pay, how you have to pay, and how long you have to do the same. To do so, you will have to pay some percentage of debt as a court fee. 

However, for an Administration Order, you have to owe a minimum of 5000 pounds with interest and charges from atleast 2 creditors. You will further have to prove to the court that you are capable enough to pay the amount. Apart from that, a county court or high court will have to make a judgment against you.

It is important to note that at any moment, the court can cancel the agreement or include an attachment of earnings order. 

#3 Individual Voluntary Arrangements

IVA or Individual Voluntary Arrangements are another way suggested by the government as government debt advice. It is a deal you make with the creditors to pay the debt amount either entirely or partly.

This money will be paid by you to an insolvency practitioner and from there, the money will be transferred to the creditors. However, you will have to present your financial details to the practitioner for this process. 

Keep in mind that IVA will only happen if the creditors who have 75% of the debts agree with it. Even the creditors who did not agree to the IVA will have to follow IVA. Make sure to be serious with the repayments, as if you do not, then the practitioners can sue you.

#4 Debt Relief Orders

This is valid if you owe an amount less than or equal to 20,000 pounds or if you are facing conditions like insufficient spare income (less than 50 pounds). You can also go for debt relief orders if you don’t own your residence. 

To apply for DRO, you will have to appeal for it from an official receiver with the help of a recognized debt adviser and also do some paperwork. However, you will have to pay around 90 pounds to the official receiver for the work. 

It is important to note that at the time of applying for debt relief orders, you will have to work or live in England/Wales for the last 3 years. Other than that, you should not have applied for DRO in the last 6 years. 

If at any time it’s seen that your financial condition is improving with time or if you are not co-operative with your official receiver, then the DRO will be canceled. DRO will not keep you away from paying bills, rents, court fines, and student loans. 

For about a year, DRO prevents you from being a director of your company or managing/promoting it further. In case, you want to lend more than 500 pounds from a lender, you will have to tell them about DRO. You will also help to keep your business partner familiar with your DRO. 

Perks of Debt Relief Orders are that you will be away from creditor warnings as they will be unable to take any action throughout the entire time. It will also help you be debt-free within a year. 

#5 Bankruptcy Order

The final way to pay your debts can be simply by applying for a Bankruptcy Order. All you have to do is fill an application for the same. This will further be monitored by an adjudicator and a final decision will be taken accordingly. 

In doing so, you will get a copy of the Bankruptcy Order and asked questions for such decisions. After that, your assets will be used for debt repayment. You will further have to be in certain bankruptcy restrictions for 12 months.

So these were the govt debt advice that you can follow in case you are unable to pay your debt. Keep in mind that before implementing any of the above plans, you might have to answer a legal question regarding your debt, assets, and income. Answer them precisely for quick debt relief.