Debt Advice Foundation is a registered national debt advice and education charity offering free, confidential support and advice to anyone worried about loans, credit and debt. Because we’re a debt charity, you can be sure that the advice we provide is impartial and based solely on what is best for you.
If you have a debt problem, Debt Advice Foundation can help you understand which options are available to you and will recommend the debt solution that is right for your situation. Our aim is to help you regain control of your finances by:
- Reducing monthly repayments to a realistic and affordable level
- Stopping creditors taking enforcement action against you
- Protecting important assets such as your home
If you are struggling to keep up with credit card, loan or debt consolidation repayments, have arrears or are facing legal action from lenders as a result of being unable to repay your unsecured or secured debts, our debt helpline advisers are standing by waiting to help.
We advise on the full range of debt solutions including Bankruptcy, Debt Relief Orders, Free Debt Management Plans, IVAs, Trust Deeds, Debt Arrangement Scheme, Administration Orders and Debt Consolidation.
IVA – Individual Voluntary Arrangement
- 50% to 60% of debt is typically written off
- Interest is frozen
- Legally protects you and your home from your creditors
- Lasts for 5 years and fees are payable
- You will have to keep to a fixed monthly budget
DMP – Debt Management Plan
- A single, affordable monthly repayment
- Some of your creditors will agree to freeze interest
- It is not legally binding
- Some companies charge 15% of your monthly payment
- You are required to repay the debt in full
- All your qualifying debts are forgiven
- After 12 months (typically) you are discharged from bankruptcy
- The court can enforce an ‘Income Payments Order’ for a further three years
- Your home is at risk
There are many companies advertising lots of different debt solutions, such as debt management plans, IVAs, bankruptcy, loan consolidation…the list goes on and on. But the question is, what would work for you and how can you be sure that the person you’re talking to is thinking about your best interests, not their profits?
More often than not, if you go to a specialist debt management company for help, you’ll be offered a debt management plan, even if it takes you 20 years to pay off your debts. Bad debt advice can often lead to an already difficult situation spiralling out of control.
Even if you think you’ve found a debt solution that will work for you, do you know how long it will last, will it affect your employment, will it affect your credit rating, is it legally binding on all your creditors, does it prevent your creditors from taking further action against you, will your home be at risk and will you have to pay a fee?
The most important thing to remember is that there is no single ‘right answer’ to debt – there is only the best solution for your circumstances. Whether you owe £1,000 or £50,000, whether you own your home or rent, and whether you’re employed or out of work right now, all of these things affect which solution is best for you.
Debt Advice Foundation’s trained advisers will help you to carefully consider all of your options. We start by asking you about your income, what you spend your money on each month, what assets you own and, of course, about your debts. We use this information to work out which solution will allow you to become debt free in the shortest time possible, without adding to your debts and whilst protecting important assets such as your home.
Everyone’s personal circumstances are different and for some, our role may simply be to help them understand their entitlements or show them how to communicate effectively with their creditors. For others, more formal debt solutions such as an IVA, Debt Relief Order or Bankruptcy may be appropriate. That’s why it’s so important to get impartial advice.
Whatever you decide to do, remember to keep making payments to priority debts such as mortgage, rent, utilities, Magistrates Court fines and Council Tax. The consequences of failing to keep up with these payments are much more severe than failing to maintain unsecured debt repayments.
If you need to talk confidentially to someone about debt, there’s no need to wait or book an appointment, Debt Advice Foundation’s debt advice helpline is open Monday to Friday.