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Alternative Debt Solutions

Bankruptcy is an increasingly popular choice to deal with debt problems. However it is important that you understand the alternatives, and form an educated decision without bias.

In order to help you reach this conclusion, please read a brief explanation of your options below, or for a more personalised experience please complete our free debt test or arrange a call back to view what options are available to you.

Debt Management Plan (DMP)

Debt management is a non-legally binding agreement whereby your income and expenditure is evaluated in order to understand what you can feasibly afford to contribute to your creditors.

From there, your specially trained account manager contacts all of your creditors to potentially freeze interest charges, and to offer on your behalf a lower monthly payment. When combined with all of your other creditors, this means you no longer struggle and get further in to debt – you only pay it off.

Individual Voluntary Arrangement (IVA)

An IVA has a similar goal as a debt management plan but is legally binding, and therefore has much more strict regulations and requirements. IVAs are a government incentive designed to write off up to 70% of your debts. The idea is that you still only pay what you can afford to on a monthly basis, but after usually 5 years, your debts are cleared.

As an IVA is a legally binding contract between you and your creditors, neither party can discontinue the scheme. This gives you the comfort that what you agree to pay won’t change unless your circumstances change during the 5 year period.

Debt Relief Orders (DRO)

A debt relief order (DRO) is generally aimed at people who owe less than £15000; similar to a DMP, it however favours those who have less than £50 left over each month after vital living cost expenditure.

Like bankruptcy, a DRO is a legal process, but is not suitable for anyone who owns assets with a value of over £300. The process is relatively similar to a bankruptcy as well, in that you pay a fee, and receive a decision on the DRO. If this is granted, your debts will be written off within 12 months.

Trust Deed (Scotland)

A Trust Deed is only available in Scotland, and is considered the alternative to sequestration. It is similar to an IVA, but generally lasts for just 3 years, and not 5. For further information on Trust Deeds please enquire now to discuss your options with an expert.

Free debt counselling and advice is also available from the Money Advice Service available at: www.moneyadviceservice.org.uk

TheBankruptcyService.co.uk doesn't charge a fee for its bankruptcy service, but receives remuneration from the partners that we work with in order to keep TheBankruptcyService.co.uk operating. Those partners must charge a fee to the customer to likewise cover operational costs, and this amount will vary depending on the solution offered, and the terms of the parner. For details of these terms, please refer to the website of the organisation dealing with your bankruptcy. Upon application with TheBankruptcyService.co.uk, we will forward your information on to one of our specialist debt partners. You will then be contacted, and you will be able to explain your case, and expert advice will be offered in order to ascertain the most appropriate debt solution.