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UK Wide Debt Advice Charity
Call us at 0800 085 0226
E-mail: contact@debtsupporttrust.org.uk

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What Does IVA Mean?

A common question asked is "what is an IVA" or "What does IVA stand for"? An IVA is just one of many debt solutions available to people struggling with the burden of unsecured debt, such as credit cards, payday loans, overdrafts or personal loans, among other forms of credit.

An IVA stands for an Individual Voluntary Arrangement.

An IVA is a form of insolvency, which is a formal route to become debt free. A formal debt solution will enable you to pay one monthly payment towards your debt and if you complete the debt solution you will become debt free at the end, with any remaining debt, interest and charges written off.

Take Care with an IVA

The IVA option can be a very efficient method to become debt free again, should it be appropriate for you. It's important to ensure you're entering the right solution because the wrong debt solution can be detrimental to your credit file as well as the time you're in the debt solution.

In the past, we've heard that some people use the letters IVA to try and describe other debt solutions, such as a debt management plan. A debt management plan lasts until all of the debt and any charges are repaid. So, in this scenario below you could be in a debt management plan for at least 11 years, whereas an IVA would be 5 years.

Unsecured debt: £40,000

Assets (like a house): £0

Disposable income: £300 per month

Tips to Ensure You're Entering an IVA

If you've chosen your debt solution and want to enter an IVA there is some information which could help you ensure you're entering an IVA and not a debt management plan. For example:

  • You need a licenced insolvency practitioner in order to enter an IVA. The Insolvency Practitioner (or IP) will propose your IVA on your behalf.
  • There will be a creditors meeting in an IVA to decide whether they want to accept your proposal.
  • Setting up an IVA takes at least 10 weeks, whereas a debt management plan is quicker.
  • Each insolvency practitioner must be registered with a regulatory body, such as ICAEW (Institute of Chartered Accountants England and Wales), so check which body your Insolvency practitioner is registered with.
  • An IVA is completed usually within 5 years, however in some instances it can be extended to 6 years. If your paperwork doesn't state the expected date of completion, and doesn't mention the words Individual Voluntary Arrangement, then get impartial advice before proceeding.
Tuesday, August 20, 2013
Debt Support Trust
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1 Week at Debt Support Trust

At Debt Support Trust we're faced with challenging questions, but we've spent the last week reviewing some of the "Big Issues" which we face on a daily basis. We thought this would be useful for other people to realise they aren't alone with their money problems.

The four main areas where we most often got asked for our support were, "what is the best debt solution", "council tax issues", "Issues with existing debt providers" and "payday loan questions".

What Debt Solution Is Best For Me?

That all depends on your own personnel circumstances. The right debt solution for one person may be the wrong advice for another. The only way anyone can give you debt advice is once they know your own personal and financial situation. A debt advice must be aware of how much you owe, how much you earn and how much you spend. They must also be aware of any assets you have. Once a debt advisor has gained this information then they will be able to advise you on the best debt solution for you.

This was the main reason people contacted Debt Support Trust - to find a way to become debt free.

Council Tax Debt

Council tax is what is known as a priority debt and should you fail to make this payment the debt can quickly be escalated debt onto a debt collection agency. This affects so many people that we speak to on a day to day basis. Once with a debt collection agency you have two options; ask the council to take the debt back (in extreme circumstances they may do this) or negotiate with the debt agency to offer them what you can afford to pay each month. If they do accept an offer of negotiation then it is imperative that you keep to your end of the deal and make your regular contribution. Failure to pay council tax, which is a priority expenditure each month, was a major problem for many people.

Issues With Debt Solutions

There are many horror stories regarding debt solutions in the debt advice industry and the majority of which are because people didn't know the full extent of the solution they were entering. We always recommend using a registered debt advice charity and ensure you're aware of all the pros and cons of each debt solution as well as any fees which may be involved. No matter what debt solution you enter, your credit rating will be affected with a default being added to your credit file for 6 years.

Pay Day loans

The advice given about pay day loans is on the increase. This is due to the fact more people are turning to short term lending. As long as they are able to reasonably pay the full amount back, once they are paid, then it can be a resolution to a short term problem. However for many more people they fall into the trap of having to continually borrow to get through the following month and the situation can quickly spiral out of control. No debt advisor should recommend getting into further debt but most understand why people find themselves in these situations.

When the problem with payday loan debt occurs, it doesn't matter how the debt was incurred, just that the contractual payment isn't affordable. People ask for our help to resolve this.

Debt Advice

Our debt advice team deal with a number of different issues relating to debt from the under-occupancy tax (bedroom tax) through to credit card debts. The top 4 issues were just the most common issues people had last week.

Tuesday, August 13, 2013
Debt Support Trust
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Church Payday Loans

The Church has vowed to help people obtain affordable credit by offering payday loans which don't come with an interest rate of over £4,000% APR. Credit unions have, for a long time, been an affordable way to borrow money over a short period of time. The Church plans to utilise the credit unions around the country, of which there are around 500, to deliver cost effective lending services.

Would You Use The Church?

The church has already established a credit union for its staff and believes their services could mean an end to high charges for people in need of short term loans. The Archbishop of Canterbury is using the power of the church to try and solve a modern day problem. In turn, it will help show the church as being an approachable organisation for problems, such as money worries.

The Church is not intending to lend money or debt collect should somebody fail to pay, but instead use the existing credit union network to deliver the service.

The Archbishop said to the head of Wonga "we're not in the business of trying to legislate you out of existence, we're trying to compete you out of existence."

What's The Difference in Payday Loan vs Credit Union

There are various routes to get affordable credit. If a debt problem has arisen and the financial problem is too severe it's important to get debt advice, however, before borrowing money from a payday lender, could there be a cheaper option?

On a loan of £400 which is borrowed for 30 days, the repayment will vary from company to company. We're compared credit unions too and the difference was remarkable.

Borrowing from a payday lender for 30 days would mean a total repayment of £525. If you borrowed the same amount of money from a credit union the amount would be £416. That's a difference in fees of £109.

There are credit unions on most high streets or accessible in local communities.

Thursday, July 25, 2013
Debt Support Trust
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Debt to Family and Friends

Debt to family and friends can cause relationship problems but a survey has shown that more people are being forced to borrow money this way to survive.

As the cost of living increases and employment slowly begins to recover, people are turning to friends and family to help make ends meet.

The Aviva report has found that the average household in debt owes £2,000 to friends and family. This is the same amount as being borrowed on credit cards.

Why Do People Borrow From Friends and Family?

We're experiencing a change in social beliefs surrounding debt. In the past, people often wouldn't share their debt and money problems with anybody, including friends and family. However, as times get tougher and the availability of credit has been restricted, it's a person's nearest and dearest that are being asked to help.

The Aviva study compared 18,000 households and also found that the average family has £13,000 of unsecured debt - a rise from £9,000 just one year ago.

What To Do In Debt?

It's vital for families in debt and struggling to repay their contractual payments to get advice. At Debt Support Trust our charity advisors have helped many people who owe money to friends and family and can provide tailored debt advice.

Our charity helps people deal with their debt problems. We do this by listening to your situation and by finding positive solutions to become debt free. There are always routes out of debt and we'll help find the right one for you.

If you want our help, you can telephone 0800 085 0226 or complete an online debt analyser for online debt help.

Debt Test

Wednesday, July 10, 2013
Debt Support Trust
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Money Problems Advice

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.

analyseyourdebt

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.

 

analyseyourdebt

Tuesday, May 21, 2013
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Energy Debt Problems

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.

Wednesday, April 10, 2013
Debt Support Trust
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Is Bankruptcy Right For Me?

 

"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.

Minimal Asset Process: If you meet the criteria you could apply for the MAP route to bankruptcy in Scotland for £90.

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

Wednesday, April 03, 2013
Debt Support Trust
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Cant Balance Transfer Debt


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 debt, 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.

Monday, March 25, 2013
Debt Support Trust
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Second Opinion on Debt Advice

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.

Wednesday, March 06, 2013
Debt Support Trust
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Help With Debt

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.

Wednesday, February 27, 2013
Debt Support Trust
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