You’ve probably heard of some debt solutions, whether it’s through adverts on social media, the TV or word of mouth, but understanding them and whether they’re an option for you to clear your debts, can be difficult to determine.
Struggling to manage debt for a long time can cause unnecessary cost. Trying to juggle debt payments, maintain household bills and live can mean that payments are missed, resulting in charges on top of the debt or higher interest rates, increasing balances.
There’s often a stigma attached to debt solutions, but it really shouldn’t matter what you’ve heard when deciding which option to take. Having an open mind is key, if it helps resolve your debt worries, stress, improves your lifestyle and clears your debts, that’s all that matters!
Debt often has a lot of influence on your life, from struggles with mental and even physical health, to problems at work and with family and friends, in this article we’ll discuss the different options you have to help clear your debts.
What solutions are out there to help clear my debts?
There are a few different options available, depending where you live within the UK. If you’re residing outside of the UK, we can still help – it may just be that your options are more limited to an informal solution. Have a read below for a simple explanation of each debt solution:
Debt Management Plan with Angel Advance: A debt management plan involves us working out a budget with you which includes all of your essential household expenses such as your rent, mortgage, utilities, and food shopping. The money that is left over will be used to pay the people that you owe money to (your creditors). This is called your ‘disposable income’.
Debt Relief Order with Angel Advance: A debt relief order is only available to individuals who have very little disposable income available to pay to their creditors, have few or no assets, and a limited level of debt. If you are eligible for a DRO we can help you with the application.
Individual Voluntary Arrangement with Angel Advance: An Individual Voluntary Arrangement (IVA) is a legally binding agreement between you and your unsecured creditors, arranged and supervised by a Licensed Insolvency Practitioner (IP). In short you agree to pay back the maximum you can afford over a specified period of time, usually 5 years, at the end of which period your creditors agree to write off any remaining balances.
Bankruptcy: Bankruptcy is a formal insolvency procedure. You can apply to go bankrupt if you can demonstrate that either your debts exceed your assets, or you are unable to pay your debts when they are due. There is no restriction on the level of debt you must have to apply.
Partial Settlements: A partial settlement is a repayment which is less than the total amount of debt owing. Sometimes, depending on circumstances – such as how long it will take to pay your debt off and the amount of your current repayment – your creditors may be prepared to write off a chunk of your balance if you can pay them a lump sum. Angel Advance offers this service.
Scottish Debt Solutions: There are multiple solutions available to Scottish residents only. If you qualify, we can refer you to our preferred partner KPMG.
Ready to clear your debt?
Get in touch! We have a team full of experienced advisers ready and waiting to help you clear your debt and take control of your finances. We understand just how difficult being in debt can be and to make it even easier, we have our Online Debt Advice tool here – for advice if you’d rather not speak to anyone.