Debt Advice is available from Money Advice Direct

Debt payment plans can ease debt hardship.

Please note that Money Advice Direct Debt Advice Service is not a Government service and is in no way connected the Government of the UK. Please beware of organisations masquerading that they have official government status.

Please watch out for statements by debt management firms such as:

'Government backed UK debt help and advice'
'Take advantage of government legislation'
'Government backed scheme'
'Write off debt with a little known government legislation'

These statements breach of OFT debt management guidance because they mislead by implication or omission as they:

• Imply that the business has official government status
• Imply that the business is in some way connected to the government.

Almost everyone owes money. In the UK debt is a fact of life. But sometimes you may find you're swamped with debts and can't see a way of paying them all. The worst thing you can do is to ignore the problem as it won't just go away.

In the eyes of the Government insolvency and debt procedures operates under a statutory framework – mainly the Insolvency Acts 1986 and 2000, the Company Directors Disqualifications Act 1986 and the Employment Rights Act 1996.

See how the Government Insolvency Act has introduced ways to deal with personal debt.

If you are worried that you may be getting into debt then Money Advice Direct will be able to give you confidential and non-judgemental advice. Call our FREEPHONE personal debt helpline for further help on 0800 074 6918 for advice on debt problems.

Individual Voluntary Arrangements (IVA) for debt management help for debt over £15,000An IVA is a formal alternative for individuals wishing to avoid bankruptcy.

The IVA was established by the Insolvency Act 1986 and constitutes a formal repayment proposal presented to a debtor's creditors via an Insolvency Practitioner. Usually (but not necessarily) the IVA compromises only the claims of unsecured creditors, leaving the rights of secured creditors largely unchanged. An IVA is ideal if you have been refused loans to clear debt.

An IVA is a contractual arrangement with creditors and can be as flexible as an individual's own circumstances; they can therefore be based on capital, income, third party payments or a combination of these. An IVA is ideal alternative to bankruptcy to clear debt.

Creditors take a decision at a creditors' meeting called to consider the IVA proposal. The return to creditors is often higher than they would receive in bankruptcy. A vote is taken by value. More than 75% in value of those creditors who vote at the meeting by person or by proxy must agree in order for the arrangement to be approved. If any of those voting are 'associates' (usually business associates, friends and family) then a second count is taken and 50% of non associated creditors must approve it.

Debt management plans

Please don't panic if you have been refused credit or loans in the UK you can still clear debt with a debt management plan. If you have enough money left over after paying your priority creditors and essential expenses, you may be able to arrange a debt management plan.

A debt management plan is an arrangement with your creditors to pay back the debt by regular installments. Instead of you speaking to your creditors yourself to arrange the plan, a Debt Management Company (DMC) does it for you. Usually you have to pay for this service although there are some DMCs who will do this for free.

The advantages of using a Debt Management Plan are that:

• You make only one payment under debt management. The monthly amount is divided fairly between all your creditors
• You don’t have to contact your creditors yourself, under debt management, this is done for you.
• Debt management is a strong alternative if refused a loan in the UK.

Trust Deeds for debt management help in Scotland over £8,000

The Protected Trust Deed (PTD) is a formal arrangement that is used in Scotland where a consumer debtor grants a ‘deed’ in favour of the trustee which transfers their assets to the trustee for the benefit of creditors.

Provided certain conditions are met, the Trust Deed may be registered as “protected”, thereby preventing creditors from petitioning for the debtor’s sequestration.

The main advantage of entering into a trust deed are that it takes the pressure off as all correspondence and the Trustee will handle all of the communications from a persons creditors.

Bankruptcy for debt management help over £750

Bankruptcy is an option that often has to be considered when an individual cannot pay their debts as they fall due. A first time bankrupt with debts will generally receive their discharge one year after the date of the bankruptcy order. If you have been refused loans to clear debt then bankruptcy may be the only option.

Although bankruptcy has a bad stigma and is publicly advertised, it should always be considered when dealing with individual insolvency cases.

Please note that if you are ever faced with the prospect of bankruptcy you should look at alternatives as soon as possible such as the Individual Voluntary Arrangement procedure (IVA).

Local Government Debt Advice

Local Government or ‘councils’ (London boroughs, county councils, city councils, and district councils) provide lots of different debt help and advice services to everyone who live in their areas.

The UK Government is concerned about the levels of personal debt, and especially that young people were going into too much debt. We must thank the UK Government because it has introduced a range of measures introduced to provide debt help and advice.

The Government’s Department for Business had introduced a face to face debt advice project with more than 500 debt advisors recruited and trained, and more than 66,000 people had been helped to date. The Government debt advice commitment is also undertaking the biggest ever nationwide crackdown on loan sharks and illegal lending.

The Government takes debt advice very seriously, and there were measures in place to try and assist those who may be at risk of falling into indebtedness.

Government Bankruptcy, Debt and Insolvency

The Insolvency Service is an executive agency of the United Kingdom's Department for Business, Enterprise and Regulatory Reform (BERR) which:

• Administers and investigates the affairs of bankrupts, of companies and partnerships wound up by the court, and establishes why they became insolvent;
• acts as trustee/liquidator where no advice sector insolvency practitioner is appointed;
• Acts as nominee and supervisor in fasttrack individual voluntary arrangements;
• Takes forward reports of bankrupts’ and directors’ misconduct;
• Deals with the disqualification of unfit directors in all corporate failures;
• Deals with bankruptcy restrictions orders and undertakings;
• Authorises and regulates the insolvency profession;
• Assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay its employees;
• Provides banking and investment services for bankruptcy and liquidation estate funds;
• Advises DTI ministers and other government departments and agencies on insolvency, redundancy and related issues; and
• Provides information to the public on insolvency and redundancy matters via their website, publications, Central Enquiry Line and Redundancy Payments Helpline.
• Its staff are based at its network of 38 Official Receiver offices throughout England and Wales; its Enforcement Directorate and Headquarters in London, Birmingham, Manchester and Edinburgh; its Banking Section in Birmingham; and its Redundancy Payments offices in Edinburgh, Birmingham and Watford.

Debt Advice Information, Debt advice and confidential debt help to get debt free (subject to terms and conditions) is available 24 Hours a day in the UK

If you live in the UK and you:

• Have money problems
• Are having financial difficulties, or
• Are struggling to make ends meet

For those who want to get debt free (subject to terms and conditions) you can get confidential and non-judgemental advice via the 24 hour debt advice service and you can talk to an experienced money advice worker on 0800 074 6918 or Apply Online for Debt Advice.

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