How to get debt free in a year
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Learn how we work at Debt Advisory Centre.
Here at Debt Advisory Centre, our aim is to help people beat problem debt. With thousands of customers helped during our many years’ of experience, we know how to find the best way out of problem debt, no matter what your circumstances.
Let us take you through how we work.
How we work
Our advisors are available for anyone to talk to over the phone and on livechat. When you call us, you’ll come through to a trained debt expert who can really get to the bottom of the cause of your debt problem and what you need to do to solve it.
During your conversation with one of our advisors, they’ll ask you a few questions about why you’re struggling with your repayments, so they can work out what’s changed for you since you took the credit out.
They’ll also ask you a few questions about your circumstances at the moment, like whether you work, receive benefits, have dependants or own your own home. All these questions are to make sure we have a really strong understanding of your situation and can make the best recommendation for you.
You’ll also need to tell us how much each area of your life costs you. For instance, how much your rent/mortgage is and how much you spend on food, bills, transport, etc. This is so the advisor can work out how much you realistically have left to put towards your debts, once these essential costs have been paid, known as your disposable income.
Once all that info has been gathered, your expert advisor will then be able to make a recommendation for you. That recommendation might be to tweak your budget here and there and make cutbacks. Or it might be to start a debt solution. There are a range of different debt solutions, all with different pros and cons, but the aim of most of them is to come to a new payment plan with your creditors and put you back in a position where you can afford your repayments. There are some solutions where you might not need to repay any of what you owe – if you can’t afford to do so.
If you’re not feeling quite ready to pick the phone up to us, why not get to know our advisors before you call? You can find out exactly how passionate they are about helping people in problem debt and the approach they take to debt advice.
Some solutions require a debt solution provider, like ourselves, to run them until they’re over and if you need to start one of these solutions we’ll be here to support you every step of the way. There may be fees associated with some debt solutions once they’re up and running, but the advice and the recommendation we give is always free of charge.
How do debt solutions work?
As we said before, all debt solutions are different but the point of them is to put you in a position where you can afford your repayments each month.
You might not be able to afford to put anything towards your debts each month, because you have no disposable income. There are solutions that cater for this situation – Minimal Assets Process in Scotland, and a Debt Relief Order in the rest of the UK. This type of solution could be right for you if you can show you don’t have any money to put towards your debts and you fit the qualifying criteria.
Bankruptcy is another solution that can sometimes allow you to suspend your payments altogether. Your Trustee (the person who oversees a bankruptcy) will decide whether you need to pay anything towards your debts. If you do, you’ll start something called an Income Payment Agreement (IPA). An IPA normally lasts for three years, but if your income is made up solely of state benefits, you definitely won’t be expected to make any payments.
There are some debt solutions that allow you to keep paying towards your debts for a while and then provide some debt write-off. Individual Voluntary Arrangements and Trust Deeds work in this way. IVAs normally last for five years and then, as long as you have kept to the rules of the solution, the rest of your unsecured debt is written off. Trust Deeds are only available in Scotland and normally last for four years. They provide debt write-off for the unsecured debts included on the plan as well.
Then there are debt solutions that actually allow you to repay all of what you owe, but reduce your repayment amount. Debt Management Plans (DMP) are available everywhere in the country and work like this, and there are also Debt Arrangement Schemes, which are just available in Scotland. With this type of solution, you come to a new arrangement with your creditors and the amount you pay per month will be lowered to an affordable amount. As you are going to pay the whole amount back however, starting one of these plans does mean you’ll be paying your debts back over a longer period of time.
There are many similarities between DMPs and DAS, but the main difference between them is that a DAS is a formal way to deal with your debts – the agreement will be legally binding – and a DMP is an informal solution. With DAS, your creditors are obliged to freeze interest and charges. Creditors very often decide to freeze interest and charges on DMPs, but they don’t have to.
Our recommendation to you
It’s really important to seek expert advice before you start any kind of plan to deal with your debt. This is because applying for and starting the wrong solution can have serious negative effects for you. You may find it’s a struggle to keep going on the solution as it didn’t really fit your needs to begin with.
Our recommendation to you is nothing to worry about, we always have your best interests at heart and what you do next is completely up to you. We’ll take you through why a certain solution is best for you and why others might not be right. Once you’re fully armed with the facts, you should find you feel empowered to deal with your debts and create a secure financial future.
Use the options at the bottom of the page to get in touch with us today.
by Christine WalshBack to blog home