Can I get an IVA? If you’re struggling with debt, you may be wondering if an Individual Voluntary Arrangement (IVA) is an option for you. In this article, we’ll explore what an IVA is, who can get one, and what the benefits and drawbacks are.
What is an IVA?
An IVA is a legally binding agreement between you and your creditors to repay your debts over a fixed period, usually five years. It’s a form of insolvency that allows you to pay off your debts at an affordable rate, while also protecting you from legal action by your creditors.
Can I get an IVA?
To qualify for an IVA, you need to have at least £6,000 of unsecured debt and be able to make regular payments towards it. You also need to have a regular income and be able to afford the monthly payments required by the IVA.
One of the main benefits of an IVA is that it allows you to pay off your debts at an affordable rate. Your monthly payments are based on what you can afford, so you won’t have to worry about paying more than you can afford.
Another benefit of an IVA is that it protects you from legal action by your creditors. Once your IVA is approved, your creditors can’t take any further action against you, such as applying for a County Court Judgment (CCJ) or bankruptcy.
Drawbacks (Can I get an IVA?)
One of the drawbacks of an IVA is that it can affect your credit rating. When you enter into an IVA, it will be recorded on your credit file, and this can make it harder to get credit in the future.
Another drawback of an IVA is that it can be a long-term commitment. Most IVAs last for five years, so you’ll need to be prepared to make regular payments for this length of time.
Conclusion (Can get an IVA?)
If you’re struggling with debt, an IVA can be a good option for you. It allows you to pay off your debts at an affordable rate and protects you from legal action by your creditors. However, it’s important to remember that an IVA can affect your credit rating and can be a long-term commitment.
If you’re considering an IVA, it’s important to seek advice from a qualified debt advisor. They can help you understand if an IVA is the right option for you and guide you through the process.
If you’re considering an IVA, it’s important to understand the process involved. Firstly, you’ll need to find a licensed Insolvency Practitioner (IP) who will assess your financial situation and determine whether an IVA is the right option for you. They will also help you to draw up a proposal for your creditors, which will outline how much you can afford to pay each month and how long the IVA will last.
Once the proposal is complete, it will be sent to your creditors for their approval. If 75% of your creditors (by value of debt) agree to the proposal, it will become legally binding on all of your creditors, including any who didn’t vote. You’ll then make regular payments to the IP, who will distribute the funds to your creditors.
Can I get an IVA Duration Process?
During the IVA, you’ll be subject to certain restrictions, such as not being able to take on further credit without the IP’s permission. You’ll also need to provide the IP with regular updates on your financial situation.
If you’re unable to keep up with the payments, the IVA may fail, and your creditors could take legal action against you. It’s therefore important to make sure you can afford the monthly payments before entering into an IVA.
In conclusion, an IVA can be a good option for those struggling with debt, as it allows you to repay your debts at an affordable rate and provides protection from legal action by your creditors. However, it’s important to understand the process involved and to seek advice from a qualified debt advisor before making any decisions.
Cost of living help, the crisis is a growing concern for many people across the globe. The rising costs of necessities such as housing, healthcare, and education have made it increasingly difficult for individuals and families to make ends meet. This is especially true for those living in urban areas, where the cost of living is often significantly higher than in rural areas.
One of the biggest contributors to the cost of living crisis is the growing amount of debt that many people are carrying. Whether it’s credit card debt, medical debt, or student loan debt, the burden of owing money can be overwhelming and can make it difficult to afford even the basics of daily life.
Swift Debt Help, a UK-based company, offers a solution for those struggling with debt in the form of an IVA (Individual Voluntary Arrangement). An IVA is a legally binding agreement between an individual and their creditors. It allows the individual to pay off their debt over a period of time, typically five years, with the help of a licensed insolvency practitioner.
One of the key benefits of an IVA is that it can help reduce the amount of debt that an individual is responsible for paying back. This is done through a process called “debt reduction”, where a portion of the debt is written off by the creditors. This can help make the debt more manageable, and make it possible for the individual to afford their basic living expenses.
Another benefit of an IVA is that it can also provide a sense of financial stability and peace of mind. With an IVA, an individual will have a clear plan to pay off their debt, and they will know that they are protected from further legal action by their creditors.
In conclusion, the cost of living crisis is a significant concern for many people, and it is often made worse by the burden of debt. Swift Debt Help offers a solution to this problem through their IVA service, which can help individuals to reduce the amount of debt they owe, and achieve greater financial stability. The company’s mission is to provide cost-of-living help to those struggling with debt, and their IVA program is a vital tool to achieve that.
In addition to reducing the amount of debt and providing financial stability, an IVA also helps to stop interest and charges on the debt, allowing the individual to focus on paying off the principal balance. Furthermore, an IVA also stops any legal action from being taken by creditors, including bailiffs, county court judgments (CCJs) and statutory demands. This provides a level of protection to the individual, allowing them to focus on paying off their debt without the added stress and pressure of dealing with legal actions.
Another important aspect of the IVA process is that it provides a level of transparency and accountability. The individual will have a clear and detailed understanding of their debt and the payment plan that has been agreed upon with their creditors. This level of transparency can be extremely valuable in helping the individual to stay on track with their payments and ultimately pay off their debt.
It’s important to note that an IVA is not a suitable solution for everyone and the process of qualifying and implement an IVA have some formalities. For example, to be eligible for an IVA, an individual must have a minimum level of unsecured debt and they must also be able to make regular payments towards their debt. Additionally, they must live in England, Wales or Northern Ireland. It’s recommended to speak with a professional who can help you determine if an IVA is the right solution for your specific situation.
In conclusion, the cost of living crisis is a significant concern for many people, and it is often made worse by the burden of debt. Swift Debt Help offers a solution to this problem through their IVA service, which can help individuals to reduce the amount of debt they owe, achieve greater financial stability, and stop legal actions from being taken by creditors. If you are struggling with debt and are looking for cost of living help, it is important to explore all options available to you, and seek the advice of a professional. In the right circumstances, an IVA can be a valuable tool in helping you to regain control of your finances and achieve greater financial freedom.
Since energy prices increased, millions of households are beginning to feel apprehensive about switching their heating on during the colder months. With rising utility bills, many are seeking alternative options to enable them to cut costs whilst keeping warm.
Although energy providers have introduced a price cap of £2,500, which is better than the original cap that was initially announced (£3,549), it is still an increase of 26% for the average household.
But, what is the energy price cap?
The energy price cap is the maximum amount that energy suppliers can charge. This is set by Ofgem (The Office of Gas and Electricity Markets).
If you do decide to turn on your heating as normal but are unable to afford this increase, then you could end up in debt, which, if left unpaid, could reduce your credit score. This can negatively affect your ability to apply for credit in the future. So, instead of automatically switching on your heating and having to deal with debt at a later date, consider other alternatives to help you keep warm this winter and reduce your energy costs.
6 Ways To Keep Warm Without Gas Or Electricity
As previously mentioned, many people affected by the increase in energy prices are discovering new ways to cut back on their energy usage.
Below are just a few of the ways that could help you stay warm whilst reducing the number of times you have to switch on your heating. These tips will be particularly helpful if you are elderly and want to know how to stay warm in bed.
1. Invest In Thicker Curtains
Thicker curtains can help to trap the heat by acting as an extra barrier. Thick curtains tend to be more expensive than thin ones; however, this initial cost will save you money in the long run since they will be more effective in retaining heat and preventing drafts.
You may feel that you still need to turn your heating on, but it should be for a shorter period of time than usual.
As a side note, during the day, particularly when the sun is out, try to open your curtains to let in some natural daylight and heat.
2. Check Your Open Fireplace
If your home has an open chimney, it can provide an easy route for heat to escape.
To prevent heat from being lost this way, you should try to have a closed damper or draft excluder installed on your chimney. Additionally, by adding either of these features, it can help to stop cold drafts from sweeping down the chimney and into your home.
3. Close The Doors Of Unused Rooms
Unused rooms do not need to be heated. If you leave radiators on in unused rooms, the heat in there will be wasted, so you will be increasing your energy bills for no reason.
Instead, you should only try to heat the rooms that are regularly used. If you do this, cold air will build up in unused rooms, so you should keep the doors closed, to prevent it from moving to the other rooms in the house.
4. Wrap Up
It seems obvious, but layering your clothes will help you to stay warm. Try wearing multiple thin layers rather than a single thick layer; this way of layering will keep you warmer because heat is trapped between each item of clothing, acting as an insulator. Focus on your extremities, such as your feet and hands, since these can lose heat fast.
Additionally, have a blanket to hand for particularly cold days, or invest in a long fluffy dressing gown.
If you are looking for more long-term solutions to help you save money on gas and electricity and you are a homeowner with the flexibility to make changes to your property, then you may want to consider the below options.
5. Invest In Double Or Triple Glazing
Consider investing in double or triple glazing. Although having these fitted can be initially expensive, it will save you money in the long term.
Double or triple glazing works by trapping heat between the panes of glass which then acts as an insulator. This insulated barrier helps to reduce the amount of heat that is lost, making it more difficult for it to pass through the glass.
So, even if you need to turn your heating on, with double or triple glazing, it should not have to be for long. Additionally, once off, the heat will remain in your house for longer than it normally would.
6. Invest In Solar Panels
Use the sun to heat your house by investing in solar panels. Solar panels absorb the energy from sunlight and convert it into electricity.
The initial cost of purchasing a solar panel is high, and it takes around six panels to heat a one bedroom house.
However, you could just purchase one panel, and use it to provide electricity to heat the main room that you use.
Hopefully, this blog has provided you with useful tips to help you stay warm this winter and reduce your energy bills, whether you are a homeowner or tenant.
Regardless of whether you are employed or unemployed, there are things you can do to ease your financial situation if you are struggling with debt. Additionally, you may want to consider a debt solution, such as an Individual Voluntary Arrangement (IVA), to help you manage your debt.
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Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.
Are you struggling with multiple debts? There are many debt solutions available, so, depending on your circumstance and financial situation, there will be one that is right for you. For example, a Debt Relief Order (DRO) may be an option to consider.
What Is A Debt Relief Order?
A Debt Relief Order is a form of insolvency that is only available in England, Wales and Northern Ireland. It is an alternative to going bankrupt and instead writes off the debt you are unable to pay off in a reasonable amount of time. Debt Relief Orders have been designed to provide relief to people who have borrowed money, allowing them to try and improve their financial situation.
To meet the Debt Relief Order criteria in England and Wales, your total debt needs to be below £30,000 and you only have £75 or less per month as spare income after paying for reasonable or essential living expenses. Also, this must be your only Debt Relief Order in the last 6 years, and your assets must be worth £2000 or less. You must have lived or worked in England or Wales in the last 3 years.
If you are accepted for a Debt Relief Order, your name will be placed on a register called the Individual Insolvency Register, and it will remain there for the length of your DRO, plus an additional three months.
Not all debt can be included in a Debt Relief Order. For example, student loans and criminal fines are not included. The ones that can are called qualifying debts.
How Long Does A Debt Relief Order Last For?
When you have a Debt Relief Order, you can get your debt written off after 12 months if your financial situation remains the same in that time period and you continue to meet the qualifying criteria.
The Official Receiver, an officer of the Insolvency Service, is the one who accepts your application, and they may extend your DRO or end it early, depending on the circumstances. Most DROs last for 12 months.
After those 12 months, your debt will be written off.
8 Debts To Include In A DRO:
1) Utilities and Council Tax Arrears
Account Assets Audit Bank Bookkeeping Finance Concept
A Debt Relief Order can help with household arrears, which include the likes of council tax, gas, electricity, rent and telephone bills. Council tax debts in particular are important debts to deal with as non-payment of these can have serious consequences such as imprisonment.
Debt Relief Orders are one way of clearing council tax debt. Council tax going forward will need to be paid as normal.
Payday loans are small amounts of money that are lent between paydays, usually between £50 and £1000, and last for a few weeks. They are well known for having high interest rates and small windows in which the money can be paid back.
This style of loan often leaves people struggling to pay the loans back, and can make their financial situation worse. This is especially likely if you are already in financial difficulty when taking out a payday loan.
Having a DRO offers relief for your payday loan debt and can be written off at the end of the process.
4) Overdrafts
Overdraft debt often comes with high-interest rates, and can sometimes feel like the money is your own instead of borrowed. If you have a current account with the bank you owe money to, they may take money from said account to pay themselves back that overdraft debt you owe.
A Debt Relief Order allows your overdraft debt to be written off at the end of the DRO.
5) Benefit Overpayments
Benefit overpayments are when you have been paid more than you are entitled to in benefits. It can be easy to struggle to pay back benefit overpayments, especially if the money has already been spent before realising it was an overpayment.
Benefit overpayments that are included in your DRO cannot be recovered.
Unless they are a result of fraud, benefit overpayments can be written off.
6) Hire Purchase or Conditional Sales Agreements
Hire purchases and conditional sales agreement items do not legally belong to you until they are paid off fully. If you have paid less than 33% of your hire purchase agreement debt and you miss payments, you may have to return these items if you have a DRO. Transferring the ownership of these items to someone who can pay for them may also be an option.
In certain situations, you may be able to not have this included in your DRO if you are not in arrears with your payments. Speak with your Official Receiver about whether you need to include your hire purchase or conditional sales agreement in your Debt Relief Order.
You cannot have a hire purchase or a conditional sales agreement if you do not make them aware that you have a Debt Relief Order.
7) Finance Items
Some items, such as washing machines, can be bought on finance, which includes Buy Now, Pay Later (BNPL) purchases. These are short-term finance options where customers can make a purchase and pay for it at a later date.
Buy Now, Pay Later debts can have interest attached, although sometimes that interest only comes into place after a specific amount of time. Some BNPL debts can be interest-free. Whilst they don’t impact your credit score at the time of writing, they may in the future, and having Buy Now, Pay Later debts combined with other debts can still impact you financially.
Depending upon the nature of the agreement, the money borrowed may be secured on the item purchased. Failure to make the payment could mean that the item is repossessed so ensure you are aware of the terms and conditions of the agreement.
8) Loans From Family Or Friends
Loans from family and friends can also be written off with Debt Relief Orders, however, bear in mind that this means that the person you owe money to will not be repaid.
There are various options that are available for you to use if you are struggling financially, and it is important that you find the right solution for you. If you find you are in need of a solution such as a DRO or an IVA (Individual Voluntary Arrangement), you need to ensure the one you apply for meets your needs, and that you meet the criteria so it can help with your financial situation. At Swift Debt Help we can fully assess your financial situation to see if we can offer a solution that meets your needs.
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Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.
Are you wondering whether taking out a loan is the right thing to do? Well, before you start applying it is best to consider what types of loans are available so that you can make an informed decision concerning your financial situation.
There are many types of loans to suit people’s different circumstances. For instance, whilst student loans are commonly heard of, there are also types of loans that can help you pay off existing debt.
Hopefully, this blog should help you to decide the option that best suits you.
How Do Loans Work?
Each type of loan works differently. Mostly, a loan is a fixed amount of money that a lender offers to you, and the amount that you borrow will have to be paid back in full, usually with interest, over an agreed period.
However, not all loans have interest rates. Additionally, some have variable rates, so the amount that you pay back each month can vary. On the other hand, a personal asset could be used as collateral, if you fail to pay back what you borrowed.
The different categories of loans are as follows:
Secured Loan
So, what is a secured loan?
A secured loan is a type of loan where a personal asset, such as a house, is used as security for the lender. In simpler terms, if you fail to pay back what you have borrowed, then the lender can repossess the asset.
Generally, it is a property that will be used as collateral, but other valuable items can be used as well, such as a car.
Unsecured Loan
Now, what is an unsecured loan?
An unsecured loan is a type of loan where the lender does not require collateral. However, because the lender does not have any security in this instance, they will usually have higher interest rates.
Additionally, to receive an unsecured loan, the borrower would usually need to have a good credit history.
Instalment Loan
An instalment loan is a type of loan where the borrower repays the lender the full amount of what they owe by instalments over a set period. Typically, the borrower would also have to pay interest.
Before the loan is approved, usually an amount will be agreed on of what the borrower will have to pay each month as well as the date that it will have to be paid.
Revolving Credit
Revolving credit is a type of loan that is flexible. The borrower can make repayments but then withdraw again as long as it is within their pre-approved credit limit. This type of loan tends to be reviewed every 24/36 months to ensure it still suits the borrower’s needs.
The borrower would usually have to pay interest and, with regards to what they have borrowed, there is typically a minimum amount they would have to repay each month.
What Are the Specific Types of Loans?
1) Personal Loan
Lending taken out by an individual, and not a business would be considered a personal loan.
They can be used for a range of purposes such as home improvements, buying a vehicle or for consolidating multiple, high-interest debts. Often their flexibility and short-term repayment plans can be convenient if you have an unexpected expenditure, such as a high bill.
Additionally, some people may take out a personal loan to help them with a new business venture.
Personal loans can be secured, but typically they are unsecured, meaning the lender will not require any collateral.
The borrower will usually have to pay interest on a personal loan, either at a fixed rate or variable; the rates you will be offered will depend on your credit history and current financial situation.
A Hire Purchase (HP) Agreement is a credit agreement where you hire an item (for example, a car or other high-value item) and pay an agreed amount in monthly payments. You do not own the item until you have made the final payment.
Because the lender has more security with this type of loan (they can seize the car or item if you fail to make your repayments) these lending agreements can often be available to those with a poorer credit history. Rates tend to be lower, the better the credit score that you have.
The borrower will pay off the loan in fixed monthly instalments. Usually, the loan amount and the interest rate that the borrower will have to pay will depend on the price of the car, the value of the deposit that can be put down and the credit rating of the borrower.
As the Lender has security in the form of the vehicle it can be at risk of repossession if payments are not maintained.
3) Student Loan
A student loan is a sum of money that a student borrows to help them pay for their higher education, such as for a course at a college or university. They can also help to cover living expenses if a student isn’t earning enough or if they are unemployed.
A student loan is available from both the government and private lenders and the borrower, and, typically, the borrower doesn’t have to start repaying it until they are earning a certain amount of money.
The interest rate will vary depending on the type of student loan.
4) Mortgage
Mortgage loans help a borrower buy a property, typically a house.
A mortgage is a secured loan, meaning that the lender will use your property as collateral (they can seize your property if you fail to make payments).
There will also be an interest rate to pay, which will depend on the credit history and current financial situation of the borrower. Additionally, the deposit amount that the borrower is able to put down will also be an important factor.
The mortgage loan is repaid by the borrower via monthly instalments over an agreed period.
Young happy couple making an agreement with their financial advisor at home. Men are shaking hands.
A debt consolidation loan is a way for borrowers to repay multiple debts, paying them all off with one bigger loan. This type of loan can be used to pay off multiple types of credit including credit card debt, overdrafts, and personal loans.
Since this allows all of the borrower’s debt to be in one place the interest rate may be lower which could help them to reduce their monthly payments.
Additionally, a single monthly payment can be easier for a borrower to manage, rather than being responsible for making payments to multiple creditors.
6) Payday Loan
A payday loan is a short-term loan, usually available on the internet or from high-street shops.
This type of loan, typically, comes with a high-interest rate and it has to be paid back within a month. If you take out a payday loan, then you will usually have to agree that your lender can take the money that you owe from your bank account.
7) Doorstep Loan
A doorstep loan (also referred to as home credit) is a type of loan that can help you with an emergency or any short-term costs.
It is known as a doorstep loan because the lender visits the borrower’s home to give the loan in cash, then returns at a later date to collect the repayments. However, these days there is usually an option to receive the loan and make repayments online.
The amount you can borrow in a doorstep loan is usually up to £1000. They come with high-interest rates since they are typically easy to apply for even if the borrower has a bad credit history.
A loan shark is a type of lender that is not authorised by the Financial Conduct Authority (FCA).
This is an illegal type of lender. They charge very high fees and there is hardly any paperwork involved.
If the borrower fails to repay what they owe, then a loan shark will generally use illegal means to try and get the money.
If you have taken out a loan with a loan shark and they threaten you, then contact the police immediately. You can report a loan shark on the following Government website https://www.gov.uk/report-loan-shark
Now that you’ve read some information about the different types of loans available, hopefully, you will be able to make an informed decision on the right option for you. However, Swift Debt Help can offer advice regarding other debt solutions, such as an Individual Voluntary Arrangement (IVA).
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Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.
Debt consolidation is a term used when a person has several debts that they decide to merge into one loan. This is done by taking out a new loan to pay off their original debts. Since all of the debt is in one place the interest rate may be lower which should help to reduce the monthly payments.
You may not fully understand what debt consolidation is, or you may be unsure whether a debt consolidation loan is the right debt solution for you, which is why we have listed some of the myths that are associated with debt consolidation loans below.
1. Debt consolidation impacts your chances of credit
Initially, once you’ve applied for a debt consolidation loan, you will see a dip in your credit score; however, this dip should only be temporary.
If you stick to your new monthly payments as well as continue to keep an eye on important factors that affect your credit report, such as ensuring that you’re enrolled on the electoral register, then you should see your credit score begin to increase over time.
This means that a debt consolidation loan will not affect your chances of successfully applying for new credit or getting a mortgage in the long term.
2. Debt consolidation allows you to pay back less money
Many people find a debt consolidation loan to be an attractive option because obtaining one bigger loan with a reasonable interest rate can work out cheaper in the long run.
However, before applying for a consolidation loan ensure to calculate what you will pay back in total compared to your current repayment arrangements.
Depending on your existing lines of credit and their interest rates, along with your credit rating, there is a risk that you could potentially only qualify for a loan with a high-interest rate. This means that you could end up paying back more than you would have done in your current situation. That is why it is essential to do the comparison exercise mentioned above.
3. They Result in more debt
A better way to view a consolidation loan is that you are restructuring your existing debts into a new form that works better for you. As detailed above, whether or not you ultimately pay back more or less in total will depend on your circumstances and the loan that you take out.
You may want to take a consolidation loan that is of a higher interest rate than your existing credit, if it gives you the ability to spread the payments over a longer term to make them more manageable for you on a monthly basis. Some people find that having one payment to make is much more manageable than having to pay many creditors individually.
4. You’ll save on interest
Usually, creditors will assess your credit report before deciding on a suitable interest rate for you.
If you have a high credit score, then you may be able to get a good interest rate deal on your new loan.
However, if you’ve been struggling to pay your creditors, then it’s unlikely that your credit score will be high which means you may be offered a poor interest rate deal.
5. Debt consolidation is a scam
Debt consolidation is a legitimate solution for those struggling with multiple debts.
Be wary of any companies that approach you out of the blue, directly offering financial assistance. It is unusual for a reputable lender to approach people directly if you are not already a customer of theirs; or you have not made an application for credit.
If you are considering consolidating your debts then you should be able to find a reputable lender through comparison websites.
Benefits of a Debt Consolidation Loan:
All of your debts will be in one place.
Once the original loans are paid off in full, you will no longer be threatened with legal action by the initial creditors.
The debt of your new loan will be repaid through monthly instalments. As it’s only one loan that you’re repaying, the interest rates can be much lower (depending on your credit score), making it more affordable.
Simplifies your outgoings, making it easier for you to budget.
Hopefully, this blog will help you to decide whether a debt consolidation loan is right for you; however, if you’ve been declined a Debt Consolidation loan and are struggling to meet the demands of your multiple creditors then submit your details at Swift Debt Help, and we’d be happy to give you a callback to discuss alternative debt solutions.
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Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.
A payday loan is usually a small amount of money that a person can borrow from a lender on a short-term basis. Since people who require a payday loan typically have bad credit, the interest rates are usually high. This can make it difficult for borrowers to pay the lender back. If you’re in this situation, there are steps that you can take and various debt solutions available which can help you out of your financial situation.
Before being accepted for a Payday loan, the lender should consider whether you’ll be able to pay it back. They’ll take into account your incomings and expenditures; however, they can’t advise you whether a Payday loan is the right debt solution for you.
There are debt solutions that may be more financially practical which we’ll provide details on.
However, if you’ve already borrowed money from a payday lender and are struggling to repay them, then consider the below steps:
Contact your lender and explain your situation. They are required to advise you on where to seek independent debt advice. They may be able to temporarily freeze any interest as well as accept smaller repayments.
If you’re certain that you’re unable to make payment you could consider cancelling your direct debit so that no further payment can be taken. Before you do this, assess the risks; get in touch with your lender to let them know that you’ll be cancelling. Also, find out if there’d be any cancellation charges. If you’d still like to cancel any further payments being taken, inform your lender of your decision.
Keep a record of all conversations you have with the lender regarding your payday loan. A paper trail may come in handy should you ever need it in the future for evidence purposes.
If your lender offers to roll your loan over to the next month do not accept it. There will be extra charges to rolling your loan over which will add to your already outstanding debt.
If you think that your financial problems are long-term, then consider the various debt solutions that are available to help you with your payday loan and other unsecured creditors.
Debt Solutions
The debt solutions that may be available to you if you’re struggling to repay a payday loan include the following:
1) Individual Voluntary Arrangement
An IVA (Individual Voluntary Arrangement) is a legally binding agreement that can be arranged by an Insolvency Practitioner to help you repay your creditors in an affordable way over a set period of time.
Before the payment plan is arranged and put forward to your creditors, your income and expenditure will be assessed by your IP. This is to ensure that you have enough money each month to pay for necessities, such as your rent/mortgage, bills, and food.
Once an affordable amount for the payment plan is decided, and if it’s accepted by your creditors, then you’ll have to pay the agreed amount each month and stick to the agreed terms.
2) Debt Relief Order
A Debt Relief Order (DRO) is ideal if you have limited assets. This debt solution lasts twelve months and if your situation hasn’t improved in this time, then any remaining debt will be cleared.
Once your DRO is in place, your lender will not be able to take any legal action against you.
To be considered for a Debt Relief Order, you must meet certain criteria, such as your debts not exceeding £30,000. Additionally, you must have resided in England, Wales or Northern Ireland. Also, your surplus income must not exceed £75 per month. If you own a property, you will not be eligible to apply for a DRO. You must also pay an upfront fee of £90.
3) Debt Management Plan
A debt management plan is ideal for someone who is struggling with non-priority debts. This includes credit card debt and unsecured loans, such as a payday loan.
A DMP is an informal arrangement between you and your lender where a payment plan is set up based on what you can realistically afford. They are relatively easy to arrange; a third-party company will set up the plan and pay any money owed by you to your lender.
It is worth mentioning that if your lender decides they are no longer happy with the informal arrangement, then they could still take legal action against you.
4) Bankruptcy
If you’ve explored all other avenues and failed to find a solution to pay back your payday lender, then bankruptcy may be an option for you to obtain a clean slate.
You can file for bankruptcy yourself. When applying, you’ll need to pay £680 to the Insolvency Service.
Once you’re declared bankrupt, creditors can no longer take legal action against you. However, if you do have any assets, then these can be sold to pay off your debt.
Your bankruptcy will become public information, and it will remain on your credit report for six years.
Additionally, there are bankruptcy restrictions that you’ll have to abide by, but you are usually released from these after twelve months.
If you are considering entering into a debt solution and want to learn more, then get in touch for further advice. Alternatively, we have several guides and articles available online with more information.
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Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.
When you enter into an IVA (Individual Voluntary Arrangement), you agree on a payment term with your creditors. The IVA usually lasts five to six years, after which the debts included within the arrangement will be written off and you will be debt free. Most things will be handled on your behalf by your Insolvency Practitioner, but it is still important for you to understand what happens once your IVA is completed. These are the key things that will happen at the end of your IVA.
1. Your Insolvency Practitioner will check your repayments
Before the IVA can officially be concluded, your Insolvency Practitioner (IP) will check that your repayments have been made in full. If they have not, the IVA will be extended and you will make further repayments until you have paid the agreed upon amount. They will also check that you have complied with any other obligations, like the sale of assets or equity release from your home, if applicable.
2. Make your final payment
Provided that you have made the rest of your payments in full, you can now make your final payment to your IP. Once they have received it, the IP will complete any final administration required on your account and make a final distribution to your creditors.
3. You will receive an IVA completion certificate
You will be sent a certificate to prove that you have made all payments towards your IVA and your debts are now officially forgiven.
After 3 months, your name should be removed from the insolvency register. However, you should double-check because this will not always be done automatically.
4. Your debts will be written off
Once you have received your certificate, the IVA is no longer in force and you’re released from your obligations under the arrangement. Once the creditors receive the certificate, they update their records and write off any remaining balance.
5. Enjoy a debt-free life!
Now that your IVA is completed, the debts that were included are now fully settled and you no longer have to make a monthly payment towards them. The disposable income that you were using to pay your IVA, is now freed up to use as you please. Not only do you have the peace of mind of being free from the burden of debt, but you should also have a more comfortable budget within which to manage your day-to-day living.
Do you require an IVA? Get in touch with Swift Debt Help today and we can support you throughout the process.
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Disclaimer: For guidance only. Financial information entered must be accurate and would require verification. Other factors will influence your most suitable debt solution.
Between January and August 2016 the average debt per household in the UK had increased by £412.30 according to TheMoneyCharity.org.uk. This increased pressure of debt felt by so many in the UK can result in both mental and physical ailments that wouldn’t normally be associated with being in debt.
We all worry about debt (worry is an obvious one), but worry alone can make everyday tasks feel difficult and laborious, even going to work can feel like a real strain when you are worried sick about debt.
We’ve listed below some of the less obvious debt related ailments which studies have shown have a high correlation with being in debt. If you suffer from any of these it would be worthwhile using our online debt solution finder to see whether we can help you reduce your debt levels. You may find that we can help you write off up to 90% of your debt.
Do you suffer from any of these?
High blood pressure? – Worrying about how you are going to make the next payment? How to ask your family/friends for money? The phone ringing? The postman calling? Bailiffs? All of these can cause high blood pressure which in turn can lead to more serious complications such as strokes and heart disease.
Feeling Anxious? – Anxiety can be brought on by the stress caused by being in debt and often goes hand in hand with high blood pressure. All of the worries that can cause high blood pressure can also result in anxiety.
Aching muscles? – Waiting for that next credit card bill or ‘red’ letter to drop through the letterbox? Believe it or not, studies have shown that being in debt can also cause muscle aches and strains as well as migraines. Studies also suggest that people with higher levels of ‘debt stress’ are also more susceptible to ulcers, back pain and muscle tension.
Depressed? – It’s no surprise that debt can leave you feeling depressed. The kids need new shoes, you’re desperate for a holiday, your gas bill is growing instead of shrinking regardless of how little you use the heating… the list goes on. Not being in control of your financial future can leave you feeling, well frankly, depressed…
Catch every cold going? – The last thing that you need when your head is full of debt is having it full of cold as well, but being in debt can also have a negative impact on your immune system leaving you more susceptible to coughs and colds that you’d usually fight off. Chronic stress and staying awake at night worrying about debt can both substantially lower your immunity to infections.
Always arguing? – When you are stressed and worried it can be hard to have a rational conversation with your partner. Poor communication within a relationship however can often lead to its demise. Arguing about the debt and consequences won’t help at all… It doesn’t have to be like this though…
If you can relate to any of the ailments above and believe that debt is having a detrimental effect on your health, give Swift Debt Help a call on 0800 211 8790 or complete our simple debt solution finder and we could help you become debt free. We’ve helped hundreds of people just like you (read our customer reviews) so what are you waiting for?
