You're Having Money Problems, Then Our Debt and Money Advice
Charity Can Help
Money problems can affect personal relationships, employment,
the ability to eat and sleep and leave people in a general panic.
It's a horrible feeling. A day comes when enough is enough and
support is required.
It can be a bailiff visit, a telephone call or the stack of
unopened mail at the front door toppling over which was the final
Debt Support Trust is a registered UK charity. Our advice lines
are open providing confidential debt and money advice between 8am
and 7pm Monday to Friday. Everybody we help is struggling with
You're not alone in dealing with debt, but within 15 - 30
minutes we can help you with a solution to your money problem. If
you would prefer to submit your details online we can call you
back. Our debt analyser will also give you an idea of a debt
solution which may be applicable for you.
Many people are not aware of the possibilities which exist to
become debt free. There are debt solutions which deal with every
level of money problems, from token payments to creditors through
to insolvency solutions. The benefit is these debt solutions will
help you become debt free again.
Token Payments: If you have a short term money
problem, perhaps through job loss or reduced income, then token
payments towards your creditors can help. A token payment is a
manageable monthly payment towards your debt, but it will be lower
than your contractual monthly payments.
Debt Management: This is a management solution
which enables you to pay one payment to one company until all of
the debt is repaid. Interest and charges are not guaranteed to be
frozen but some creditors may decide it's best to freeze interest
and charges to help you resolve your money problems.
IVA: The IVA is a formal debt solution where
one monthly payment is made, usually for 5 years. At the end of the
5 years any debt which is not repaid is written off. The Scottish
equivalent is the Trust Deed and lasts for 3 years.
Bankruptcy: In some instances bankruptcy is the
best option to deal with money problems. There are different routes
to enter bankruptcy and it's best to seek advice over which route
is best for you.
If money problems are worrying you, then do something about them
today. Call 0800 085 0226.
You will be greeted by a trained advisor who will listen to your
debt problem and guide you through the options. It's our
responsibility to ensure you have the necessary information to make
an informed decision about your debt solution.
This is why we explain the pros and cons of every debt solution.
You can get specific advice for your money problem today by
telephoning 0800 085 0226 or by completing the debt analyser and
requesting a call back.
Shocking report highlights the financial struggle to pay
A report commissioned and released by Uswitch shows that one in
five UK households are struggling to meet their payments to their
gas or electricity supplier. This has resulted in 20% of households
In the UK owing money to their gas or electricity supplier.
The Uswitch research found that 5 million homes were struggling
to pay their energy supplier on time. This is up 1 million in 1
year and the total debt has risen by another £159 million, to £637
1 in 10 people said a payment plan would help them get back out
of debt. 2% of people will move to a prepayment meter. The
prepayment meter is the most expensive way to receive gas and
Your energy supplier is considered to be a priority debt - a
debt which should be paid first before any unsecured debt. This is
the same as mortgage/ rent, council tax and food. These are all
priorities to stay healthy and safe.
Many people we help at Debt Support Trust tell us they can't pay
the gas and electricity because of their unsecured debts. The
unsecured debts are usually more threatening, with telephone calls,
letters and sometimes debt collectors turning up demanding payment.
This often means priority debts are not paid.
There are a number of things you can do if you have gas and
electricity debts to your energy supplier.
The most important step is the first step - speak to your energy
supplier. You're not alone in worrying about your debt so they can
Secondly, it's important to repay the debt. This can be managed
in a monthly payment plan. If you owe £600 it can be daunting to
repay that amount in one go, but you don't have to. Speak to your
energy company and offer them an affordable amount each month. If
you are unemployed then they may be happy to accept as low as £1
Thirdly, if you are not paying your gas or electricity because
you are paying credit cards, overdrafts, payday loans or any other
type of unsecured debt, then give us a call. Our charity advisors
can help. There are debt solutions which can deal with unsecured
debt and help resolve your financial worries. If you need help with
debt problems please telephone 0800 085 0226.
"Bankruptcy is one of the
best known debt solutions, but is it the right solution for
We all want to ensure we receive the best debt advice so we can
make informed decisions. There are a number of different debt
solutions available across the UK. By understanding each debt
solution you're able to make a decision on how you wish to become
Bankruptcy is one of the most well-known debt solutions. As a
result, many people think they are bankrupt when they call our
charity. However, that's not always the only option. Most people
have two or three debt solutions which they could enter to resolve
debt problems. And, in other cases we tell people that bankruptcy
is not the right solution for them.
Bankruptcy is a solution to debt and money problems. But, many
people enter the solution unaware of the consequences.
When creditors are sending letters almost every day, the
telephone won't ringing with creditors wanting their money back and
you have no idea how to pay them, then the common response is,
"just make me bankrupt".
However, that's not always the best choice.
For instance, is it a short term problem, like being unemployed
for a few months? Do you have an asset which has equity in it? Is
the interest and charges the problem? These are all factors which
will determine whether bankruptcy is the best advice for you.
bankruptcy costs to enter the solution
Bankruptcy costs between £90 and £700 to enter, per person. This
is a fee you have to pay so you may have to save up money.
2. Bankruptcy lasts 1 year but you
could be asked to pay for 3 years
Being bankrupt lasts for 1 year and then you are discharged.
However, if you can afford to pay something towards your bankruptcy
then you will be asked to do so.
3. Bankruptcy will last on your
credit file for 6 years
Even after you've completed your bankruptcy your credit file
will be impaired for at least 6 years.
4. Your assets are reviewed in
If you have a property or a car then there will be a valuation
carried out to determine if there is any equity. In bankruptcy,
only your share of the equity can be taken for the benefit of your
creditors. So if it's a joint property the other owner would keep
their share of any equity.
5. Bankruptcy can affect your
It's imperative to check your contract of employment before you
enter bankruptcy. Some employers will dismiss their employees who
There are various ways to enter bankruptcy. The right route
matters because there is a cost involved. Furthermore, bankruptcy
is different in England, Wales and Northern Ireland compared to
Creditor bankruptcy: A creditor can make you
bankrupt. This means you don't have to pay the fees to enter
bankruptcy, however if you have an asset with equity then you may
DRO: A Debt Relief Order costs £90 and is for
specific people who can't afford to repay their debt. You have to
meet the strict criteria, such as the debt must be below
Court bankruptcy: If you don't qualify for a
DRO you will have to visit your local county court and submit
bankruptcy papers. This costs £700. If you are unemployed or earn a
low income, then this fee can be reduced to £525.
Creditor Sequestration: Your creditor can
petition for your own bankruptcy. This means you avoid the
bankruptcy costs, but your assets will be considered in the
LILA: Low Income Low Asset is one route to
enter bankruptcy in Scotland. It costs £200 and you need to meet
the criteria. You can apply for a LILA with with Accountant In
Certificate of Sequestration: Bankruptcy via a
Certificate of Sequestration costs £200 and is applied for when the
LILA route is not suitable.
Balance transfers provide ideal support for short term finance
problems. However, for one reason or another, the next balance
transfer may not be possible. This is often true when you have
completed several balance transfers over a number of years and the
introductory offers expire, meaning you can't balance transfer your
Balance transfer is typically an introductory offer to entice
you to move your debt from one credit company to another.
For instance, you may move your credit card, overdraft and store
card where you are paying 3 rates of interest, to one new credit
card with one simple monthly payment. The balance transfer could be
held at 0% for 9 months. This introductory offer means you will pay
no interest on this money for 9 months.
Balance transfers often incur a fee, thereafter the interest
free period means the monthly repayments are going towards clearing
the debt - no simply repaying the interest.
The availability of credit has reduced since the credit crunch
began. Consequently increasing numbers of people are struggling to
move their debt to a more affordable and manageable payment
When balancing transferring debt, it's important to have a long
term plan. For example, after the introductory period, what's next?
How will you eventually become debt free again? Most importantly,
is the balance transfer helping you become debt free or is it just
delaying the debt problem for another time?
Once all balance transfers have been explored the next choice,
if you can't afford to repay your debt, is a debt solution. There
are debt solutions available which can resolve debt and money
problems when you can't balance transfer debt anymore.
When applying for credit via the balance transfer route, a
footprint is placed on your credit file. If you are rejected
multiple times for credit, in a short period of time, it can alert
credit agencies and make obtaining credit even harder.
There are debt solutions which make repaying the debt more
manageable. Most debt solutions will help you make a monthly
repayment to one organisation and some solutions can even help
freeze interest and any charges incurred. Debt solutions can affect
your credit rating for 6 years so the pros and cons of every
solution will be explained in full detail.
If you believe you have a debt problem and that balance
transferring your debt is not going to resolve the debt problem
then we're here to help. Debt Support Trust is a charity and our
volunteers and advisors will be more than happy to help you with
your debt problem. You can telephone us on 0800 085 0226.
It's common to worry that you're making the wrong financial
decision when it comes to debt. What one debt advisor recommends
may not be the same as another, so getting a second opinion on debt
advice received is a good idea.
Most organisations will not ask you to part money for advice,
certainly charities won't ask you to pay for debt advice. So,
getting that second opinion can really help you decide on the next
step to resolve your debt problem.
There are multiple debt solutions available and different ways
people can offer these solutions, for instance
Choosing your solution to debt is step one but you then have a
choice over which organisation helps you become debt free. There
are plenty of organisations to choose from and we're more than
happy to help.
It's always recommended to get a second opinion on debt advice.
Debt Support Trust helps a large number of people who have been
contacted by cold calling companies who explain that debt can be
written off and then the person will be debt free.
Often when this happens the individual isn't aware of what will
happen to their job, their house or if there are any other debt
solutions available. So, we can then help fill in the gaps.
When deciding on the appropriate debt solution it's essential to
know all the facts so you can make an informed decision. A second
opinion on debt can help determine which debt solution is going to
be best and give peace of mind that the right debt solution is
If you would like debt advice, or a second opinion on your debt
situation, a Debt Support Trust advisor is on hand to help today.
To speak to an advisor please telephone 0800 085 0226.
Debt problems can make people feel like they are alone and with
no idea where to turn, however, Debt Support Trust is a charity
which exists to support people who need help with debt.
After a 15 minute conversation with one of our advisory you will
realise that there are solutions to your debt problem and you can
become debt free again. For some people becoming debt free will
take a matter of months, but for others it may take years. The
important point is that you're taking steps to manage your debt and
getting the necessary support and help with debt you need.
All conversations with anybody at Debt Support Trust is
The first stage of any debt problem is realising there is an
issue. Whether you've used all your credit, a payday loan is due to
be repaid and you can't afford it or your credit card statement has
just arrived, you can take the first step today to becoming debt
The help that can be offered for a debt problem will depend on
the level of debt and the other financial circumstances. A £100
debt can be as difficult to manage as a £60,000 debt if the person
is on benefits or has very little disposable income. We never judge
the situation based on the level of debt - it's about finding a
long term solution to a financial problem.
You may have tried other debt solutions in the past and failed
to clear the debt. Commonly, we help people who have entered a debt
solution, such as a debt management plan, but ended up in more debt
than when they started.
There are various routes to become debt free so if you're having
problems becoming debt free speak to a charity which can help.
Becoming debt free doesn't always require a debt solution. At
times, simple steps and advice can make all the difference. Our
trained experts will guide you through the process of resolving
your debt should negotiating with creditors be the best option.
In other instances a debt solution is essential to help freeze
interest and charges and create an affordable repayment plan. Most
debt solutions will help you make one affordable monthly payment
towards all of your creditors. Some debt solutions can even freeze
interest and charges to help with debt problems.
There are positives and negatives to every debt solution and
these should always be explained fully and considered before
entering any debt solution.
If you would like honest debt advice to help you become debt
free then speak to Debt Support Trust today on 0800 085 0226.
We help thousands of people become debt free at Debt Support
Trust. The charity is committed to helping people who have debt
problems find a route to become debt free again. One solution which
is sometimes applicable is an IVA, in England, Wales or Northern
Ireland and a Trust Deed in Scotland. However, many people contact
our charity to say "I've been missold an IVA or Protected Trust
An Individual Voluntary Arrangement, or IVA, is suitable for
about 10% of people who contact Debt Support Trust. The majority of
people may have heard about an IVA through TV advertising, however,
there are pros and cons which should be considered before anybody
enters the solution.
An IVA allows a person to make an affordable monthly payment
towards their debt for 5 years. Near the end of the IVA assets,
like a house or car, are reviewed to determine if there is any
equity. You are not expected to sell your house, but the equity
would need to be released, typically through a remortgage or third
party purchase. If this is not possible then the IVA can be
extended for 1 extra year to cover the equity.
The Protected Trust Deed is the Scottish equivalent of the IVA
but only lasts for 3 years. The property is dealt with differently
in a Protected Trust Deed compared to an IVA.
With almost 50,000 IVAs and Trust Deeds in the UK every year
it's a popular solution to deal with debt, but is it the right
Insolvency practitioners are required to propose an IVA or Trust
Deed to your creditors. The fees for managing your case will run
into the thousands, with some fees being £7,000 for the 5
These fees are reviewed and accepted by your creditors, but high
insolvency practitioner's fees means that less money will be
returned to your creditors.
If during the course of the IVA or Trust Deed you inherited
money and could afford to repay all of your debt, you would also
have to pay for insolvency practitioner fees too.
It's a question we get asked a lot - have I been missold an IVA
or Protected Trust Deed and sometimes there's an easy answer and
others it's less clear.
Often we hear about people thinking they are in an IVA or Trust
Deed, to only find that they are in fact in a debt management
Before entering your IVA or Trust Deed were you told about the
length of time your solution would last? This can often change
during the course of the solution for multiple reasons. Were you
informed about assets? Equity in a property, car, stocks, shares or
bonds should be explained fully. Were you provided with every
available debt solution? You may not wish to enter a debt
management plan, debt arrangement scheme or bankruptcy but, if
applicable, you should be informed of the pros and cons of this
If you feel you have been mis-sold an IVA or Trust Deed you
should first speak to the debt solution company. The company should
then conduct and investigation and determine if you are correct. If
they disagree with you then you can approach the Financial
Ombudsman Service for free. They will then determine if you have a
Council tax is a priority debt, which means it's important to
make this payment on time. However, that's often easier said than
done, especially if you have other debts such as payday loans,
credit cards, overdrafts etc.
So, if you need help with council tax debt
problems then Debt Support Trust can help. We're a registered debt
advice charity providing complete debt advice on a range of debt
problems, from council tax debt through to credit and store
If you have not paid your council tax bill then often the first
stage is for the council to involve the bailiffs. The bailiffs will
contact you via letter to request the money. If you fail to contact
the bailiff they may then visit your property.
If you owe the council money for council tax then they may
proceed to court if they cannot retrieve the money. At this stage
they will apply to the magistrates' court for a liability
order. You can attend the court to explain the situation, if
you wish. You will be responsible for the costs for the liability
order which is £40.
The council proceed to court to obtain the liability order
because it means they can then recover the money they are owed.
If the bailiffs are already involved with your council tax debt
then you can seek help from Debt Support Trust. One of our reliable
debt advisors will discuss your case and provide tailored
Bailiffs will contact you first before proceeding to court. The
bailiff will want you to pay a reasonable sum of money towards the
debt each month. You can negotiate with the bailiff to make a
payment plan. Failure to maintain the payment plan will mean the
bailiff will be back in touch.
Council tax debt can also be recovered via a number of other
methods. One route which is often used is via an attachment of
earnings. This is where the council arrange to take the money owed
directly from your salary. An attachment of benefit would see the
money taken directly from your benefits.
The council can also place charging orders against your property
or even make you bankrupt if the debt is large enough. In extreme
circumstances you can be sent to prison.
Your council tax bill can be reduced depending if you qualify
for one of the reductions. These discounts off your council tax
For confidential help with council tax debts you should speak to
Debt Support Trust on 0800 085 0226. Our advice is
available via the telephone and internet from 8am -7pm Monday to
If you have other debt too then you can complete our online debt
analyser and receive immediate help 24/7.
We met a woman recently who borrowed £20,000 from her friends
and relatives by simply saying, "Give me money please". She also
had a further £30,000 in unsecured debt to credit cards and
Asking friends and family to "give me money" is understandable
when times are tough financially but what happens if a friend or
family member does give you money and you can't repay them?
Because the availability of credit is harder to come by people
are also asking friends and family to borrow money in their name.
The money is then repaid to the friend/ family member each month.
However, who is liable and what happens if you can't repay the
In some debt solutions your friends and family will not get all
of their money back, which is why we're explaining the process.
When things get tough financially there's often a friend we can
rely on to help us get to the end of the month, every now and then.
It's cheaper than borrowing money from a payday loan or credit card
But, what happens if your debt situation is far worse and you're
not trying to borrow £20 but instead it's a lot more? Your friends
and family may have the money, but can you realistically repay
If interest and charges have grown too large then you may be in
a position to borrow money from friends and family to pay your debt
then repay them each month. However, if your debt problem is too
severe it's often best to seek professional debt advice from a
Remember, if you borrow money from a friend or family and then
enter a debt solution they may not get all their money back. We can
explain fully and in-depth what this would mean for you. To speak
to a debt advisor at Debt Support Trust please telephone 0800 085
If your friends or family don't have the money to lend you they
may borrow the money themselves to help pay off your debt. In
exchange you would repay the money each month. This could be more
affordable for you, however, it can be a problem in the long
At Debt Support Trust we are helping increasing numbers of
people who are repaying friends or family who have borrowed money
to help them out of debt. The friend or family member is then
liable to repay the debt.
Often people not only owe their friend or family member but also
credit cards, overdrafts and personal loans. A friend or family
member is considered as a creditor in a debt solution, like the
credit card company or bank. This can mean that debt solutions are
more complex because a friend or family member may not be getting
their money back as previously agreed, or worse still, they may not
be entitled to get all of their money back at all.
Borrowing money from friends or family is a sensible solution to
dealing with small debts, however, if the debts are larger or there
are multiple different creditors then they may not get all of their
money back. It can mean a difficult decision at a later date.
If you have serious debt problems and need help then Debt
Support Trust is here to offer help and guidance. Our telephone
number is 0800 085 0226.
You can also phone us if you have lent a friend or family member
money and need help and advice.
Can You Really Write Off Debt?
The truth is that many people are misled by the thought they can
simply write off debt. When in truth, not everybody can, or would
want to enter a solution where they repay a proportion of the debt
they owe. There are some debt solutions where you can write off the
debt you cannot afford to repay so we're going to explain when and
why you would want to enter these solutions and also who would not
Our charity receives thousands of calls from people
in need of debt advice and each person is provided with tailored
debt advice. Everybody wants to be debt free again but in
some instances, people specifically want to write off their
The solutions where a person may not repay all of their debt
would be insolvency solutions. The solution would last for a fixed
period of time and at the end of the solution any debt not repaid
would be written off.
The debt solutions where this would happen would be an IVA,
Trust Deed in Scotland or Bankruptcy.
When entering an insolvency solution, like an IVA, bankruptcy or
Deed in Scotland, you must remember that assets are considered
too. So, if you owe a car which has equity in it, usually above
£3,000, or if you have equity in your home then this would be
reviewed under an insolvency solution.
There are several solutions to debt which should be considered,
but not all will write off debt. At Debt Support Trust we always
explain why we would not recommend a solution as well as providing
you with information on every available debt solution for you.
An example of an insolvency solution where debt may be written
off would be if a husband and wife, living in England, collectively
owed £40,000. The husband works while the wife cares for the 3
young children. The household has an income of £1,700 after tax
every month and they live in rented accommodation. The family have
no assets with any equity. The family expenditure every month is
£1,400. The family is contracted to pay £800 every month in
repayments to their debt, however they only have £300 available.
This means each month they are getting further and further into
debt and can't get debt free.
The indebted individuals would be able to enter a debt solution
which would enable them to repay a percentage of their debt with
any remaining debt being written off.
A debt management plan would last for
11 years at best. This debt solution would mean all of the debt
would be repaid with no debt written off.
An IVA is a debt solution which is suitable for the couple. They
could jointly enter the solution and make a £300 payment towards
their debt for 5 years. At the end of the solution any debt which
had not been repaid would be written off. Over 5 years the
couple would repay £18,000. The licensed insolvency practitioners
would take their fees from this money and the remaining money would
be shared amongst the creditors. All interest and charges would be
frozen in an IVA and written off at the end of the solution as long
as the monthly contributions were paid as per the arrangement.
Bankruptcy would also be applicable for the couple but would be
entered individually. The husband would most likely be asked to
make regular monthly payments in bankruptcy towards their debt.
Because the wife is not working and is in receipt of benefits she
would typically not be asked to make any monthly payments. If the
couple did not qualify for a debt relief order then the cost to
enter bankruptcy is £700 each. The bankruptcy would last for one
year but the monthly payments would last for three years under what
is known as an Income Payment Order. Any debt which had not been
repaid would be written off at the end of the solution.
The debt management plan, IVA and bankruptcy would have a
negative impact on a person's credit file, so this should be
considered too before entering any debt solution.
If the couple lived in Scotland then they may be suitable for a
Trust Deed. The couple could not enter a joint Trust Deed in
Scotland so it would have to be two separate Trust Deeds. But, this
would depend on the split of debt and it may be that the couple
should enter different debt solutions.
The IVA or Bankruptcy may be the best solution for some people
but in many cases we as a charity advise against it. This is
because financially it doesn't make sense.
Under an IVA or Bankruptcy any equity in an asset must be
released and passed to the insolvency specialist. So, if the couple
above were living in a mortgaged property where the mortgage was
£100,000 but the property was worth £250,000 then there would be
£150,000 worth of equity. If the debt was £40,000 then Bankruptcy
or an IVA would not be the right solution. Instead the best advice
would be a debt management plan or to sell the house and downsize
to repay all of the debt.
There would not be the opportunity to write off debt in this
instance because the couple could reasonably afford to repay all of
Frequently we hear from people who have been advised to enter an
insolvency solution and told they can write off their debt. The
fact is that for many people it's not the right advice and could
see them lose their assets.
If you've been told you can write off debt but you're not sure
if it's the correct advice then get a second opinion from a
charity. You can call Debt Support Trust on 0800 085
0226 or alternatively you can visit your local Citizens
Advice Bureau for face to face debt help.
If you need help to decide which debt solution is best for you
then why not complete our confidential online debt analyser. After
completing the questionnaire which lasts for approximately 10-15
minutes it will give you a better idea which debt solution route is
right for you.
© Debt Support Trust 2010-2013