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If 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 straw.

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 money problems.

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.

Money Problems: The Solutions

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.

Help With Money Problems

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 priority debts

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 million.

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 electricity.

Gas and Electricity - Priority Debt

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.

Advice on Paying Gas and Electricity

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 help you.

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 per week.

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 me?"

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 debt free.

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.

Is Bankruptcy Right For Me?

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.

5 Things You May Not Know About Bankruptcy

1. Usually 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 bankruptcy

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 employment

It's imperative to check your contract of employment before you enter bankruptcy. Some employers will dismiss their employees who enter bankruptcy.

What Route Into Bankruptcy Should I choose?

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 Scotland.

England, Wales and Northern Ireland

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 lose this.

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 £15,000.

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.

Scotland

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 bankruptcy solution.

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 Bankruptcy.

Certificate of Sequestration: Bankruptcy via a Certificate of Sequestration costs £200 and is applied for when the LILA route is not suitable.

When you can no longer balance transfer it may be time to consider a debt solution.

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 debt anymore.

Balance Transferring Debt

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.

Changes to Balance Transfers

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 plan.

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.

Solutions to Balance Transfer Debt

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.

2nd Opinion on Debt Advice

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

• Are there upfront fees?
• How quickly will the solution be set up?
• Will you have to go into another solution first?
• How will your assets (house, car etc) be valued?

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.

Should I Get A Second Opinion on Debt Advice?

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 being chosen.

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 confidential.

Help with Debt

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 free.

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.

Problems Becoming debt free

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.

Help with a Debt Solution

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 Deed".

Mis-Sold an IVA

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 solution?

Fees for IVAs and Trust Deeds

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 years.

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.

Misselling of IVAs and Trust Deeds

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 plan.

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 solution.

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 case.

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 cards.

I've not paid my council tax

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.

My council tax debt is at court

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.

The bailiffs are involved with my council tax debt, what can I do?

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 advice.

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.

Other ways council tax debt can be recovered

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.

Are you getting discounts off your council tax bill?

Your council tax bill can be reduced depending if you qualify for one of the reductions. These discounts off your council tax include:

1. Single person's discount: You can get 25% off the cost of your council tax bill if only one person lives in the property over the age of 18.
2. If your property has been adapted because of a disability you may be entitled to a discount.
3. If you are part of a Government transitional reduction scheme.

Help With Council Tax Debts

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 Friday.

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 personal loans.

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 debt?

In some debt solutions your friends and family will not get all of their money back, which is why we're explaining the process.

Give Me Money: Borrowing money from friends or a family member

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 company.

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 them?

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 charity.

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 0226.

Give Me Money: Borrowing money in a friend or family member's name

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 term.

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 be applicable.

Debt Solutions to Write Off Debt

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 debt.

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.

IMPORTANT!

When entering an insolvency solution, like an IVA, bankruptcy or a Trust 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.

Debts Written Off

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.

When Would Writing Off Debt Not Be Suitable

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 their debt.

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.