Debt Solutions
There are a number of debt solutions available to you to help you solve your personal debt problems and help you become debt free. Please take our Debt Test to see which option may be most appropriate for you.
X-debt provide a personal service to assist individuals and Companies out of debt. The debt solution which maybe appropriate for you could be an IVA, CVA, debt management plan, bankruptcy, Debt Relief Order, an offer to pay creditors with a full and final payment or a Trust Deed for Scottish citizens.
A full assessment of your circumstances must be performed in order to offer advice on the most appropriate debt solution for you. Please contact us or call free on 0800 043 2424 with as much information as possible so we may advise accordingly. You can read more on debt solutions here.
IVA
An IVA is generally suited to individuals with unsecured debts in excess of £12,000 and a disposable monthly income in excess of £200. You can find more details on IVAs and how they work on our IVA page.
Debt Management
A debt management program is generally suited to those with debt levels of between £5,000 and £15,000 (although an IVA may be more appropriate with debt in excess of £12,000) and disposable monthly income over £50. You can find more information about debt management on our debt management page.
CVA
A CVA is similar to an IVA but for business debts of a Limited Company and is a legally binding with your Company's creditors. It allows a Company to improve cash flow by reducing monthly commitments. A CVA maybe undertaken so long as there is a clear defined goal and a viable business plan. Please read more on our CVA page.
Debt Relief Orders
A debt relief order (DRO) is an order granted by the Insolvency Service in cases where you can’t afford to pay off debts. A Debt Relief Order usually lasts about 1 year and during this time your creditors cannot take action against you to get their money back. Please read more on our DRO page.
Bankruptcy
Bankruptcy should generally be a last resort in cases of serious debt, and can be instigated by any creditor owed more than £750, or you can petition for your own bankruptcy. Except for certain exemptions, bankruptcy involves your assets, including your home being sold and the proceeds used to cover all or part of your debt. The aim of bankruptcy is to completely wind up your financial affairs in order to realise the value in your assets, pay off as much of your debt as possible, and essentially ‘start again’. Read more on our Bankruptcy page.
Consolidation Loans
One route out of debt involves releasing equity in the home or consolidating all debts in to one loan to reduce the monthly burden.
Refinancing refers to consolidating debts by taking out a larger loan (usually over a longer repayment term and at a lower interest rate) to pay off smaller unsecured debts, such as credit cards, HP, loans etc. Usually, a secured loan or remortgage is recommended where debt is relatively small and you have sufficient equity in your home. This equity can then be used to pay off all or part of your debt. If you remortgage and this leads to a lower monthly payment, you may also find the remaining debt is easier to budget for. If your unsecured debts are more than £12,000, consolidation may not be advisable because taking on more financial responsibility is likely to worsen your situation, particularly if the loan is secured on a property. An IVA may be the best choice in this case. The X-debt best advice model will tell you whether or not consolidation is a good choice in your situation.
Please take our Debt Test to see which of many debt solutions may be most suitable.