Debt consolidation has always been a great option available to people who are struggling to pay back several amounts of money at once. However, did you know that you can also apply for government debt consolidation loans?
While you can seek to merge all of your standing debts together with a private firm or lender, you can also approach the UK government directly for assistance if you are worried about what you need to pay and when.
However, there are a number of factors and circumstances which will need to apply to you should you wish to be made eligible for such a scheme. In this guide, we will take a look at how much support the government can offer you, and how you can appeal for consolidation to help relieve your situation. We can also offer advice on many other types of debt help if you need it.
Government Help with Debt Consolidation
If you are interested in finding government help with debt consolidation, you will need to look into something called an Administration Order.
- An Administration Order is a consolidation loan supported by the government which allows applicants to roll several amounts of debt into one lump sum.
- Applicants will need to owe a total of £5000 or less, and will need to be able to make regular payments towards such debts over an arranged period of time.
- This arrangement is agreed via county court, and as such, you will enter into a legally binding agreement to pay back a certain amount of money over a set period of time. You may be able to pay back your consolidated debt over weeks or months.
- The court will be responsible for dispersing money paid to them via each creditor in pursuit of money.
- One of the huge benefits of government debt consolidation loans lies in the fact that you can roll all your existing debts into one lump sum without being pursued for further legal action and without additional interest being levied on top.
- You may even be able to pay a percentage of the money owed depending on your circumstances and the decisions made by the court presiding.
Consolidating Debts through the Government
Consolidating debts through the government sounds like a great idea in practice. However, it’s worth bearing in mind that there are a few things required of you to be able to qualify for such support outright.
- Administration Orders are offered to applicants who owe money to two or more creditors, and who also have an existing CCJ or HCJ on file which they cannot pay outright. Essentially, you will need to prove that you are in a situation where you cannot pay either your creditors or the court in full right away.
- Fees can and will apply if you apply for an Administration Order. You’ll be expected to pay a fee of no more than 10% of the total amount due whenever you make a payment via court. For example, if you owe £2500, you’ll need to pay up to £250 in court fees each time you pay a little off your consolidated debt.
However, it’s worth noting that there are other ways through which you can obtain debt support from the government, and one of the most popular options is that of an Individual Voluntary Arrangement, or IVA.
- An IVA is another type of consolidation service whereby an arrangement is made with you and an appointed Insolvency Practitioner (or IP) to negotiate a plan with your existing creditors.
- You will arrange to make payments to your IP who, in turn, will clear payments with your creditors.
- Your IP will help you to set up a payment plan you can feasibly afford.
- Once again, further legal action and interest can be frozen through this type of scheme. Your IP may be able to petition the court to request that further legal pursuit be stopped until arrangements are otherwise made.
- Do bear in mind, however, that creditors do not have to agree to the terms of an IVA.
Government Grants for Debt Consolidation
There are also ways through which you can obtain government grants for debt consolidation. If you are unsure whether or not government debt consolidation loans will apply to your situation or needs, you can apply for an Informal Arrangement, or IA, if simple consolidation simply will not relieve your situation. As with IVAs, creditors do not have to accept IA applications or payments via grant or loan schemes.
Debt consolidation loans can offer many people a feasible route out of standing debt with several creditors at once. As such, it is worth exploring options for grants and consolidation with your local debt advisory service as soon as possible.
Do bear in mind that if you choose to enter into a government debt consolidation scheme, grant or loan arrangement, creditors may request that terms change if your income changes, or if you are able to pay off debts to them sooner than previously established. With this is mind, it is always worth discussing your options at length with a debt advisor near you.
UK Government Debt Loans
UK government debt loans offer just a few ways through which you can start to emerge from standing debt to a number of different sources. Owing several different parties different amounts of money can be extremely stressful – which is why there are many different ways for you to relieve yourself of such a situation within comfortable means.
However, you must always remember than consolidation advice and debt relief of any kind may have an impact on your credit file – and therefore on your ability to borrow money in future.
It is always a good idea to discuss government debt consolidation with an advisor before you make any applications known. A friendly expert will be able to find you the most feasible and comfortable route towards complete debt relief – one which will satisfy your creditors, and will ensure you can continue to breathe easily. Call our experts today to learn more about government debt support available now.