Please see below the list of Frequent Asked Questions as it
relates to DICUS, Bankruptcy,IVAs, Sequestration, Company Voluntary Arrangement, Trust Deeds and Debt Management Plans.
Q. Do you offer your services
to other businesses apart from Debt Management
Companies and Insolvency Practices?
ANS. Yes we offer our services
to other businesses such as Mortgage and Accountancy Firms
who also perform financial
affairs drafting and document collation tasks
Q. What services do you
provide directly to consumers?
ANS. We offer drafting
services to consumers that have already received independent financial
advice
Q. Are there other hidden
charges to your service as they are lowly priced?
ANS. We do not have any hidden charges, all our charges are
displayed on our FEES page along
with our terms and conditions.
Q. Will you visit clients’
homes to collect documents and prepare their statement of
financial affairs?
ANS. Only if necessary,
however we endeavour to have our meeting over the phone and ask
customers to
send document via post in order to keep our charges and costs low.
Q. Do you provide Debt advice?
ANS. Yes we do but only on behalf
of our licensed clients and Partners.
Q. Why would I need my
financial affairs drafted?
ANS. With a properly drafted
statement of financial affairs, finance professional can identify the
exact
problems with your finances and prescribe a solution. It can also be used as
evidence
of your financial status which is a requirement most lending
institutions ask their customers
to provide.
BANKRUPTCY FREQUENTLY ASKED QUESTIONS
What is an Attachment of earnings?
This is money legally taken out
of your wages in order to pay your creditors. A creditor usually makes this
application to court.
What happens to my bank account when I declare
bankruptcy?
A bankrupt person’s bank account
would be closed in bankruptcy. However a bankrupt person is allowed to hold a
basic bank with a different bank. A creditor bank may not allow an account to be opened with them
because of the fact that they are owed money and also have a poor credit
rating.
Will I lose my job I if declare bankruptcy?
This will depend on the type of
job you have. You cannot be a director of a limited company during the
bankruptcy restriction period. Certain positions in the armed services may be
prohibited if bankruptcy is declared. While there are many jobs that are
unaffected if a debtor declares bankruptcy, the best way to be certain of the
implication on a particular job is to look at the terms of contract of the job
and make enquires. As a general rule, positions of authority such as management
roles may be more vulnerable in bankruptcy compared with lesser roles in a
company.
Can bankruptcy restrictions be shorter than 12
months?
Yes, though most bankruptcy
restrictions last for 12 months, it is possible for the restriction to be less
than 12 months; it depends on the debtor circumstance and the judgement of the
Trustee.
How will gambling debts affect my bankruptcy
application?
Debts resulting from gambling
have serious implications in bankruptcy, especially if your behaviour is
perceived to be reckless. This is deemed to be an offence in bankruptcy law; as
a result, such an offence may carry up to 8 years in bankruptcy restrictions.
will my landlord evict me if I declare bankruptcy?
This depends on the type of
tenancy agreement you have. There are certain tenancies that may be put at risk
if bankruptcy is declared, therefore you may be evicted if your breached the
agreement. Some landlords may not be concerned with their tenants’ bankruptcy
provided they continue to receive rent payments as normal.
Can all my debts be written off in Bankruptcy?
It depends, most debts can be
written off but not all types of debts. Commercial unsecured creditors and tax
liabilities such as credit cards, loans, overdraft, catalogues, VAT, income tax
can be written off. However student loans, court fines, debts owed to the child
support agency and some types of state benefit overpayment cannot be written
off. For any more questions on this issue please contact us.
Can my Bankruptcy application/declaration be
rejected?
No, it is a legal instrument
available to everyone burdened with high amounts of debt, in order to have it
cleared and then start afresh.
Do I lose my bank account if I go bankrupt?
No, as long as you have no debts
tied to your bank. If you have debts tied to your bank, then you will have to
close your bank account. Therefore you will need to open a new bank account
with another bank if this is the case.
What is Bankruptcy?
Bankruptcy is another way that an
individual can deal with personal debts, which they have no hope of repaying.
If you are declared bankrupt, you will no longer have to repay your creditors
yourself and the court will protect you from any further actions that your
creditors threaten against you. However, where you can afford to make any
payment towards your creditors, then you will be made to do so by the court for
up to 3 years.
Will I lose my Mobile phone and Car if apply for
IVA or Bankruptcy?
You will not lose your mobile
phone if you apply for an IVA. However you might be asked to reduce your tariff
if it’s deemed to be high and cannot be reasonable justified. The same
principle applies in bankruptcy
If I declare bankruptcy will I still be able to
apply for a mortgage in future?
Yes, you will be able to apply
for a mortgage, though your credit rating will have suffered and the mortgage
you will get may be slightly more expensive.
Will my house be repossessed if I go bankrupt?
In bankruptcy, you will no longer
own your house: the court becomes the owner. They acquire the right to sell it
in order to share the proceeds amongst your creditors. However, you do not lose
your house immediately in bankruptcy: although the courts have the title to
your house, you will be allowed 12 months of grace to find someone to help buy
the house back or look for alternative accommodation.
Will I get a bailiff at my door if I go bankrupt?
No, you will not get bailiffs at
your door if you declare bankruptcy. By declaring bankruptcy you are actually
legally protected from any actions taken by your creditors.
How long can a bankruptcy restriction order last
for?
For many bankruptcies the restriction
is usually 12 months as stipulated in the Enterprise Act, however, the
restriction can always be extended to between 2 years and 15 years, if you are
deemed to have been guilty of recklessness or illegality in accumulating the
debt that led you to bankruptcy.
What happen if I win the lottery or come into
inheritance when I am bankrupted.
If during your 12 months of
restriction in bankruptcy you win the lottery or come into money you will be
required to use those funds to pay off your debts. However, if the money comes
after you have been discharged from bankruptcy then it’s all yours to keep.
Will bankruptcy affect my job?
In most cases, going bankrupt
will not affect your job. However, if you are a director of a company, a
qualified professional in a high position or in the military ranks you may lose
your job. To be absolutely sure about the position regarding your job, you will
need to check your terms and conditions of employment
Will bankruptcy affect my crediting?
Yes. It will affect it adversely
.The record of your bankruptcy will remain on your credit file for 6 years
meaning that it will be more difficult for you to obtain credit during that
time. However, practically speaking, you will be able obtain credit after you
have been discharged from bankruptcy (usually after 12 months) though the cost
of the credit may be initially high but this will reduce over time. The
positive in a bankrupt’s case is that the debts have been completely written
off and all your money is available to you for your general living.
1)
Possible Release of Home Equity 2) Minimum Level of Debt is £15,000 3) Using
credit during the Arrangement is not allowed 4) Stick to a regimented regime
for 5 years 5) Damaged Credit Rating for 5 years 6) Its longer than Bankruptcy
7) Pay back more than you will in bankruptcy 8) You must include all creditors
what are the Pros of an
IVA
1)
Debt Free in 5 Years 2) Telephone Calls and Payment Demands Stopped 3) Interest
and Late Payment Charges Frozen 4) Single Monthly Payment 5) Repaired Credit
Rating 6) Fixed, Legally Binding Agreement 7) Protection from Court Action 8) A
Private Agreement 9) Professional Status Unaffected
Will an IVA affect my
credit rating?
Yes.
It will affect it adversely. The record of your IVA will remain on your credit
rating for 5 years. However, you are able to take out a mortgage while you are
still in an IVA.
Can I apply for credit
during my IVA?
Legally
speaking, you can apply for credit during your IVA, but doing so will put your
IVA at risk. If this is discovered it would be considered a breach of your IVA
agreement and will result in you becoming bankrupt.
If an individual applies
for an IVA and has joint agreements with their partner, are creditors able to
pursue the non iva partner?
Yes,
creditors would be able to pursue the partner not in an IVA for repayment since
the joint account holder is equally responsible for the repayment of the debt
I am in a joint IVA, what
happens if we separate and sell the house?
If
you are in a joint IVA and you decide you want to sell the house and go your
separate ways, but still want to continue paying the monthly IVA instalments ,
you should talk to your IVA supervisor as soon as possible and let them know
before you go ahead. If there is no provision in the IVA for equity release and
your joint overall circumstances remain roughly the same, with no substantial
change in monthly income and expenditure, then you should be ok.
Can my wife and I start
an IVA?
Yes.
Indeed many couples seek the relief that can be realised by undertaking a joint
IVA proposal to deal with their combined debt issues.
Can Joint debt be
included in an IVA?
Joint
debt may be included in an IVA but if only one of the joint debt holders has
entered into an IVA then the creditor can go after the other person on the
account in an attempt to repay the debt. However, if both account holders enter
an IVA then that debt will be treated as any other debt to be written off in
the IVA.
Can I arrange an IVA
directly with my creditors?
No.
To be nominated for an IVA (which is regulated by the Insolvency Act 1986) you
will need the services of a licensed Insolvency Practitioner (IP). The IP will
also supervise and review your IVA throughout the duration of the Arrangement.
What is an interim order?
An
Interim Order prevents your creditors from taking or continuing any legal
action against you. If you have any pending court action relating to your
unsecured debts, your Insolvency Practitioner may apply for an Interim Order to
stop this while the proposals for your IVA are being prepared.
What if I lost my job
during the IVA?
If
you lost your job, you would need to inform your supervisor about your change
in circumstance, then try and look for another job as quickly as possible. You
will most likely get a payment holiday until you find another job. The months
you missed will be added onto the end of the 60 months term so you can catch up
with the months you missed.
What if my income gets
better during the IVA?
If
your income improves, you might be required to increase your IVA payments. You
will not necessarily be asked to hand over the whole of the increase. The
additional amount you pay will depend on other factors such as whether as a
result of your pay increase you have any additional monthly expenses (e.g.
additional travel costs). All in all your Insolvency Practitioner will make
this assessment and judgement to determine the level of increase you would have
to make.
What do I say when the
creditors call during my IVA application?
Firstly,
you should not be afraid of speaking to your creditors when they call. Simply
let them know you are currently applying for an IVA and advise them that they
will be getting a proposal of how you intend to pay them back soon when your
proposal document is ready.
Does the debt that I owe
on my car go into the IVA?
If
your car is on hire purchase you will not be able to write the debt off in an
IVA. However, if the debt on your car is from an unsecured bank loan or a finance
agreement, it can and will be included in the IVA.
Can I keep my current
bank account when I apply for an IVA?
If
you have any debts with your current bank you will not be able to keep your
bank account because your bank will be one of your creditors in your IVA
application. Therefore you will need to open a new bank account with another
bank if this is the case.
Does an IVA affect my
share option scheme with my employer?
Yes,
it does: if you are part of a share option scheme and you contribute monthly through
your wages, you will need to stop paying before you enter into an IVA
agreement. If the shares at the time of presenting your IVA proposal can be
cashed in, then you will have to add the amount to your IVA proposal.
What is an IVA?
An
IVA or Individual Voluntary Arrangement is a legally binding agreement with
creditors. It allows someone who is in financial difficulty to make a formal
proposal to settle his/her debts within a reasonable and fixed period of time -
normally 5 years. The repayment proposal is based on what you can afford to
pay. After the agreed payment period, any outstanding debt will be legally
written off by your creditors. As such, the IVA offers a solution with a
specific end date so you know exactly where you stand and when your debt
problem will be over for good.
What is a Joint IVA?
A
joint IVA is simply two IVAs presented as one. It is a very efficient way for
married or unmarried couples to enter into an IVA – and especially if their
incomes, debts and other finances are joint.
What if I own a property
in a foreign country? How will it affect my IVA?
It
will simply be treated like any other asset you own. If it’s within the EU, you
may have to release equity from the property as part of your IVA arrangement.
Will I lose my mobile
phone and car if apply for an IVA or declare bankruptcy?
You
will not lose your mobile phone if you apply for an IVA. However, you might be
asked to reduce your tariff if it’s deemed to be high and cannot be reasonably
justified. The same principle applies to bankruptcy.
Do I have to include all
my debts in the IVA?
Yes,
you have to include all your unsecured debts in your IVA application. If you
ignore any, or do not include a particular debt in your IVA application, it would
lead to a rejection of your IVA proposal by your creditors when this is
discovered.
Can I apply for IVA or
Bankruptcy if the debts were caused by Gambling?
Yes
you can apply for an IVA or Bankruptcy if your debts were caused from Gambling.
In order for your IVA to succeed you will need to show evidence that you have
stopped gambling and will not go back to the old habit again.
If I enter into an IVA
will I lose my family home?
No.
But you may have to release your share of any equity from it
How much will it cost me
to enter into an IVA?
It
could cost you between 60 -62 months of your disposable Income. For more details
please see the call DICUS.
What is a notice of
completion?
This
is a document to confirm that your IVA has ended and that your debt has been
completely written off.
What is a variation of
terms/ variation meeting?
The
IVA Variation process involves discussing with the supervisor (the Insolvency
Practitioner) the nature of the variation (changes to your IVA proposal. i.e.
reducing or increasing your payments) and if they agree that it is an option, a
new set of proposals will need to be drawn up and forwarded to you for you to
sign and agree to. Once these have been returned to the supervisor, they are
then presented to the creditors for their consideration once these have been
returned to the Supervisor, they are then presented to the creditors for their
consideration.
What do I do if I want to
stop my IVA?
The
steps to take would be to cancel direct debt payments towards it and declare
yourself bankrupt, or simply contact your IVA supervisor for advice.
If I get into an IVA,
will I still be able to apply for a mortgage in future?
Yes,
you will be able to apply for a mortgage, though your credit rating will have
suffered. A completed IVA means you have managed to clear your debt and have no
more debts. The record of an IVA will no longer be on your credit file after 6
years.
Can I apply to for an IVA
as a Director of a company?
Yes,
you can. An IVA will not affect your duties as a director.
Does my employer have to
know if apply for IVA or Bankruptcy?
The
IVA is a totally discreet procedure. Your employer will not be informed and the
fact that you are in an IVA is not made public. However, in bankruptcy you
employer will not be informed but the fact that you are bankrupt will be made
public in your local paper and the London Gazette.
Will I lose my job if I
apply for an IVA?
No
you will not, The IVA is a totally discreet procedure. Your employer will not
be informed.
What happens if the value
of my house drops and I cannot re-mortgage in the IVA?
If
that happens, the creditors are most likely going to suffer the same loss and
get nothing. Practically, you may be required to extend your payment terms by
an extra 12 months. The best advice would be to speak to your supervisor
(Insolvency Practitioner) if this occurs.
What should I do if my
debts are less than £15,000 and too low for an IVA?
Your
options could be a debt management plan, a debt Relief order or Bankruptcy.
Can I combine my debts
and my partner’s debts together and enter a joint IVA?
Yes,
you can: this is simply two IVA applications presented as one.
Can I apply for an IVA if
I live abroad?
Yes,
you can, but only if your stay abroad can be proved or argued to be temporary
and you intend to return to the UK.
Will my IVA affect my
partner?
No.
Your IVA cannot affect your partner because all your debts are legally yours
and have nothing to do with your partner.
Will a County Court
Judgement affect my application for an IVA?
No.
Your IVA will most likely overturn the issues arising from the CCJ.
Will I be able to keep
running my business or my professional employment in the Armed Forces?
Yes.
There is no limit to your business activities and you can continue as a member
of the police or Armed Forces with no risk to your career.
What kind of debts can be
included and written off in an IVA?
Only
unsecured debts can be written off in an IVA: examples are credit cards, store
cards, overdraft and bank loans. Court fines, parking fines, mortgage debt and
Child Support Agency debts cannot be written off in an IVA.
What if I get a better
job and then can afford my debt payment during the IVA?
If
you get a better job and feel you are in a position to pay for your debt by
being out of your IVA, you should speak to your Insolvency Practitioner
directly about your decision. A full and final IVA settlement should be
considered.
Can you include members
of your family as a creditor in an IVA?
Yes,
they can be included in an IVA. In an IVA they will be part of the vote that
takes place in the IVA process. However, they will not partake of the dividends
paid out of the receipt for the IVA payments.
Can I apply for a credit
card while in an IVA?
Legally
speaking, you can apply for a credit card during your IVA, but applying for
credit during your IVA will put your IVA at risk. If this is discovered, it
would be a breach of your IVA agreement and will result in you becoming
bankrupt.
What happens in an IVA if
I get married or begin a serious relationship?
Nothing
extraordinary will happen. However, if by the fact that you are in a new
relationship you have more disposable income because of the extra income
generated by your partner that would mean you may have to pay more money into
your IVA.
Can I keep my car in an
IVA?
Yes,
you can. However, if it is a very expensive car, say, from £12,000 upwards and
it’s difficult to justify having it then you will need to sell your car and
replace it with a cheaper one
Will an IVA help stop my
home from being repossessed?
It
all depends on your circumstances. An IVA may help if your application puts you
in a better financial position, such that you can better afford your mortgage
payments. But if after assessing your IVA viability, keeping up with payments
on your mortgage still seems a struggle then most likely you will lose your
home. The best solution for you might be to sell your home as soon as possible
before it gets to that stage.
How much debt can go into
an IVA?
You
need a minimum of £15,000 with more than 2 creditors to apply for an IVA.
Will an IVA affect my
credit rating?
Yes.
It will affect it adversely. The record of your IVA will remain on your credit
rating for 5 years. However, you are able to take out a mortgage while you are
still in an IVA.
What are the differences
between an IVA and Bankruptcy?
An
IVA involves a 5 year payment plan while bankruptcy at most may involve a
payment plan that lasts 3 years. In some cases, after 12 months of being
bankrupt, there will be no payments made at all. IVAs are private and discreet.
However, in bankruptcy your name will be published in your local paper and also
in the London Gazette. In bankruptcy you will be banned from company
directorships, professional positions and military ranks for the duration of
your bankruptcy (normally 12 months) - while with an IVA you will be free to
hold any business, professional or military position. In bankruptcy, any
valuable assets you own including your house will be taken over by the court
and may be sold for the benefit of your creditors, but with an IVA your house
will remain under your control although you many have to release equity from
your property.
What are the differences
between an IVA and a debt management plan?
An
IVA is a legally binding arrangement while a DMP is not. Interest and charges
are frozen in an IVA: these are not frozen in a DMP. An IVA usually lasts for 5
years while DMPs can last up to 20 years depending on the amount of debt. Any
amount of debt can be used to apply for a DMP; however, you need to be in at
least £16,000 of debt to apply for an IVA.
What happens if my IVA is
rejected?
If
your IVA is rejected, it means that your debt problem is still unresolved. You
will have the following options; apply for an IVA again once your circumstances
have changed, arrange a debt management plan or to declare yourself bankrupt.
For most people bankruptcy is the best and final option because it resolves the
problem once and for all.
If I stop paying my debt
while I apply for an IVA, will I have bailiffs knocking at my door?
As
long as you have only just recently stopped paying your debts you will not get
a bailiff at your door. To get a bailiff at your door would mean that you must
have stopped paying your debt for a long time, say, at least 10 months and you
have ignored all opportunities to deal with the problem.
Will an IVA or bankruptcy
affect my pension?
The
answer to this question is not straightforward. It depends on what type of
pension you have and how close you are to your retirement age. There are 3 main
types of pensions; these are the Occupational Pension Scheme, Personal
Pensions, both of which are private pensions and finally the State Pension. In
an IVA, your monthly private pension contributions will have to stop. However,
your State Pension contributions and Occupational Pension contributions will be
allowed as long as they are of a reasonable amount. Your lump sum saving or
investment in a personal pension will have to be cashed in if it is cashable and
this will form part of the deal in an IVA. In bankruptcy the Private Pension
investment will also have to be cashed in if cashable to pay off your
creditors. State Pension funds for an individual cannot be touched or made
available for an IVA or bankruptcy. However, if you are retired, income from
your State or Private Pension will be used to determine your contribution in an
IVA or an Income Payment Order (the contribution you make in bankruptcy.) In an
IVA, if you are close to retirement age your creditors may allow you to
continue making payments towards your Private Pension. However, this rule is
not cast in stone: it still remains up to the creditor to accept this
arrangement.
TRUST DEED FAQs
How do I apply for the Trust deed?
Call us on 08717899864 and we
will talk you through the process. We will help you fill in the forms ,answer
any questions you have and help you set the ball rolling
What are the disadvantages of a Trust Deed
1) Your Income and assets go to
pay creditors and you may lose your house if you are a home owner 2) its last
36 months while Sequestration(bankruptcy) lasts 12 months 3)Your credit rating
will be affected
What are the Advantages of a Trust Deed
1) You avoid the legal
consequences of bankruptcy 2)You can force some creditors to agree 3) up to 90%
of your debts can be written off 4) it’s not publicly advertised
Will I lose my bank account?
If your bank will be one of the
creditors in your Trust Deed, then you will have to open a new bank account
with a bank you have no debt with
what are the requirements
a minimum of £14,000 of debt is
required to apply of a Trust Deed, it may be possible to apply with less debt
depending on the circumstance.
Will I lose my car in a Trust Deed
No you will not, unless the car
is of a very high value and cannot be justified. i.e. £20,000 car. When a £5000
car would suffice. If you have a very expensive car you will have to sell it
and get a cheaper one.
Will applying for the Trust Deed affect my job
applying for Trust Deed will not
affect your Job. It is also confidential. your employer will not be informed.
What is a Trust Deed?
A Trust Deed is similar to an IVA
but it is for 3 years rather than 5 years and only the residents of Scotland
qualify for this solution. It is a formal, legally binding agreement between an
individual who is unable to pay his/her creditors and a licensed Insolvency
Practitioner (the Trustee). The Trustee will put together a form of proposals
to the creditors for approval and administer the Trust Deed. A Trust Deed is a
form of informal sequestration (bankruptcy) but is still regulated by The
Bankruptcy (Scotland) Act 1985.
Sequestration FAQs
What is Sequestration?
Sequestration is personal
bankruptcy in Scotland. There are certain requirements which must be fulfilled
before you can do this. Your total debt must exceed £1,500. There must also be
an expired charge for payment (which follows a court decree) outstanding
against you (with no payments made to that debt).
Debt Management Plan FAQs
What if my circumstances change?
Because a Debt Management Plan is
an informal arrangement, it is easy to change it as your personal circumstances
change, and even to replace it with an alternative arrangement if that becomes
more appropriate at a later date.
How long will the plan take?
Because you are making reduced
payments on your debts, it may take longer for your debts to be paid off. This really
depends on your debt and how much you are paying monthly
Will I receive a Default Notice
By stopping your payments, you
will be in default on your original credit agreement and your creditor is
therefore entitled to send you a Default Notice. Creditors send out Default
Notices to protect their own legal position
Do creditors always accept reduced payment offers?
Creditors do not have to accept
any offer of repayment below the contracted minimum. However it is our
experience that they are prepared to accept reduced repayment offers where we
are able to demonstrate that the offer we have made is reasonable and that you
are committed to repay your debts by use of the plan.
Does the Payment Plan cover all of my debts?
No. A debt repayment plan can
only cover your unsecured debts and arrears.
How will I know my creditors are being paid?
They will continue to send you
your statements. As long as you send your payments these statements will show
payments from you, who is being paid and by how much
What are the Cons of a DMP
1) The term is open-ended and can
be many years. 2) Your creditors can still contact you. 3) Creditors have no
legal obligation to freeze your interest and charges. 4)Your credit rating will
be affected adversely till you repay the debt in full. 5) Creditors are under
no legal obligation to stick with the agreement. They can ask for increased
payment or add more interest at any time.
What are the Pros a DMP
1) You make one affordable
payment each month. 2) Interest can be frozen but this is not guaranteed. 3)
Further down the line your DMP Company may be able to negotiate a reduction of
your debt. 4) It is excellent if used as a temporary solution.
Can I continue to use credit when in a DMP
Legally, nothing stops you from
using credit while in a DMP. However using credit while in a DMP would only put
in a worse financial position
Will I receive calls and letters if I apply for a
DMP
Yes you will still receive calls
and letters. However once the DMP has been fully established, the number of
calls and letters should reduce dramatically. Your creditor will still have a
right to contact you to find out if your financial position has improved
Can interest and charges be frozen if I apply for a
DMP
With a DMP solution you cannot
guarantee that your creditors will freeze interest and charges. Though some of
your creditors may eventually freeze interests they have no legal obligation to
do so in a debt management plan
What kind of debts can be included in a DMP
You can only include unsecured
creditor debts in a debt management plan. Examples of unsecured debts are
credit cards, store cards, catalogues, overdraft and personal loans. You cannot
include secured creditors in a DMP. Examples of secured creditors are mortgage
loans and hire purchase loans.
Can I enter into a DMP if I have a CCJ
Yes, you can have a debt
management plan arranged if you have a county court judgement (CCJ) against
you. You simply have to provide the details and documents about the CCJ when
you submit your application. However your CCJ payments will be given a higher
priority over your other payments.
What is a Debt Management Plan?
This is an informal debt
repayment agreement with your creditors to reduce the amount you pay to them
each month so that the payments fit within an affordable monthly budget. The
plan is known as “informal” because it is not legally binding on your
creditors. It is simply a “gentleman’s agreement” made between them and you to
reduce your debt repayments. It is simply a “Gentleman’s Agreement” made between
them and you to reduce your debt repayments.
Will a Debt management plan affect my credit
rating?
Yes. It will affect it adversely.
The record of your DMP will be on your credit file for a minimum of 6 years.
However, if your DMP lasts longer than 6 years your adverse credit will
continue
What is a CVA?
Company voluntary arrangement is virtually the same as an IVA; however
it’s a voluntary arrangement for companies. It’s a legal solution which is used
to rescue companies from failure due to being insolvent. The CVA is also for 5
years. The repayment proposal is based what the company can afford to pay.
After the agreed payment period, any outstanding debt will be legally written
off by the company’s creditors.
