INDIVIDUAL VOLUNTARY ARRANGEMENT

An IVA is a statutory contract which is legally binding between you and your creditors - you make an affordable payment each month for a set period, normally 5 years, and providing you keep to the arrangement your creditors will write off the rest of your debts at the end.

CRITERIA INCLUDING TYPES OF DEBTS

• You have more than £5,000 of unsecured debt.
• That you have 2 or more different creditors.
• After paying all your essential living expenditure you have a surplus income of at least £85.
• Acceptance of an IVA is decided by your creditors. For an IVA to be accepted, more than 75% of the voting creditors by debt value must approve, therefore any single creditors with 25% or more of the overall debt level must not reject the IVA for it to proceed.
• Arrears on household bills such as rent (but NOT mortgage arrears), gas, electricity, telephone and council tax can be included in your IVA, as well as consumer debts such as an overdraft, credit card or loans. Outstanding VAT, Inland Revenue debts, hire purchase or conditional sale agreements, Items brought on finance and loans from friends and family can also be included in your IVA, but if you wish to keep goods which are subject to HP agreements, you must continue to pay the monthly amounts due.
• You are responsible for maintaining payments on your essential bills, including rent or mortgage and Council Tax. Court fines, student loans, mortgage arrears or money owed under family court proceedings cannot be included in the IVA and you are responsible for maintaining payments. These payments will be considered when calculating your disposable income.

COST

• No upfront fees are charged. There are Nominee’s fees and Supervisor’s fees. These fees are deducted from your agreed monthly contribution.
• If your IVA failed, the Nominee’s fees and Supervisor’s fees would be included as a debt and your creditors may back date any interest or charges accruing on your debts.

ADVANTAGES

• An IVA is a statutory contract, therefore providing legislative protection from creditors and any legal action they may otherwise pursue.
• An IVA is a way to avoid bankruptcy proceedings and property repossession.
• An IVA consists of one affordable monthly contribution.
• All interest and charges will be frozen upon acceptance.
• Creditor contact is forbidden (other than annual statements).
• Debts included in your IVA could be cleared in 5 years.
• The time frame is set at the outset, this will only be subject to change should your circumstances improve or worsen.
• No upfront fees are charged, and the Nominee’s and Supervisor’s fees are deducted from your agreed monthly contribution.
• Homeowners will usually be able to keep their homes, provided they maintain the mortgage payments and other loans secured against their property.
• Once you have made your agreed final contribution into the IVA any remaining debt is written off.

DISADVANTAGES AND RISKS

• Acceptance of the IVA lies with the creditors. Should this be rejected, alternative solutions will need to be re-investigated with a qualified debt advisor.
• Your credit rating will be adversely affected throughout your IVA and usually, for an additional year after completion.
• There are restrictions on the expenditure of a person who enters into an IVA.
• Entering into an IVA will be entered on the Individual Insolvency Register.
• At the start of an IVA an assessment of your income and expenditure items are taken and thereafter reviewed annually. Creditors will require evidence should certain items be considered excessive and if suitable proof cannot be supplied, you will need to reduce your spending in those areas. Average increases in household living expenses will be taken into account during this review.
• Homeowners entering into an IVA should be aware that they will be expected to introduce 85% of available equity six months prior to the end of the arrangement. Due to credit scoring it may be that the terms of such an arrangement are less favourable and remortgaging may result in a higher interest rate. It could also mean that releasing equity is restricted completely and, in protocol compliant cases, the IVA can be extended by a further 12 months.
• Any windfalls over and above £500 are to be introduced into the IVA for the benefit of the creditors; any remainder after the debt has been cleared in full will be paid back to you.
• To obtain credit over and above £500 you must first get written permission from your insolvency practitioner, unless the credit if or public utilities such as water, gas or electricity.
• You may be asked to downgrade or sell any high value assets.
• Any debts that can’t be included in the IVA, will be your responsibility to pay, for example court fines, student loans or money owed under family court proceedings.
• Only unsecured debts included within the IVA may be discharged at the end of the period and unsecured debts not included remain outstanding.
• Creditors have the right to challenge the IVA within 28 days of the approval date on any material irregularity or unfair prejudice.
• Should the IVA fail, creditors may back date interest on your debts or may request your Supervisor petition for your bankruptcy.
• Entering into an IVA is a statutory contract which would require you to obey the terms of the IVA. Failure to do so could mean that the Supervisor may petition for your bankruptcy or terminate the IVA (which would leave the creditors free to pursue the debts).

DEBT MANAGEMENT PLAN

A Debt Management Plan (DMP) is an informal debt restructuring solution for unsecured debt. DMPs are provided by debt management companies and charitable organisations who could negotiate with your creditors to try to get them to accept the lower repayments and freeze any further interest that might otherwise be added to your current debt.

CRITERIA INCLUDING TYPES OF DEBTS

• You have unsecured debts that you can’t afford to repay.
• You have one or more creditor. You have a surplus income every month.
• You have a surplus income every month.
• Arrears on household bills such as rent, gas, electricity, telephone can be included in your DMP, as well as consumer debts such as an overdraft, credit card or loans.
• Hire purchase or conditional sale agreements and items bought on finance may be included in your DMP depending on the amount you have paid towards the items and the terms of the agreement.
• You are responsible for maintaining payments on your essential bills.
• Certain types of debt will not be included in the DMP. You will be responsible for paying taxes, fines, child support payments and debt which could result in loss of access to essential goods or services or repossession of, or eviction from your home. The payments towards these debts will be considered when calculating your disposable income.

COST

• There is an option to pay a fee for this service with a debt management company or you can seek advice and/or assistance from the free sector, such as a charitable organisation.
• Commercial Debt Management Companies charge a fee for their service. They should be taking no more than 50% of your payment for the first 6 months as a fee to set up the plan, and no more than 50% of your payment to administer the service for you from month 7 onwards.
• There are charitable organisations that administer DMP’s free of charge. The Money Advice Service provides details of organisations that provide free debt advice and services. For more information visit https://www.moneyadviceservice.org.uk

ADVANTAGES

• A DMP is an informal arrangement that avoids the need for formal insolvency procedures such as an IVA or bankruptcy.
• You make one monthly payment.
• By reaching agreement with your creditors, a DMP may suspend actions against you such as County Court Judgements.
• Creditors will, in many cases, freeze interest and charges.
• Your monthly debt repayments will be reduced to make them affordable.
• The service can be provided free of charge.
• You can cancel your DMP at any point.

DISADVANTAGES AND RISKS

• The arrangements are informal and are not legally binding so creditors could, if they choose, add interest and charges, or pursue other recovery action such as court action. They could also change their mind at any point.
• The time it takes to set up such a plan could result in accounts falling into arrears or increasing in arrears.
• Your credit rating may be harmed. A DMP means you are making a reduced payment to your creditors and although this has been agreed to by your creditors it will still be noted on your credit file. Your credit file will be affected for a further 6 years after your last DMP payment.
• Someone entering a debt management plan will be expected to live within a controlled budget.
• While such arrangements reduce your monthly repayments to make them affordable, it usually means you will pay more in total over a much longer period.
• Interest or charges could be added to your debt, which means the total debt to repay will be higher, and depending on your level of payment, it could make the duration of the plan longer.
• Unless your level of debt is less serious you could end up in debt for a very long time. In the worst case you may find you have no real prospect of getting out of debt and becoming debt free.
• You must maintain payments to your essential bills. You are responsible for paying taxes, fines, child support payments and debt which could result in loss of access to essential goods or services or repossession of, or eviction from your home.
• Creditors may take further action to recover the debt which may involve additional costs or charges. If a creditor has already commenced recovery or legal action, there is no guarantee that it will be suspended or withdrawn.
• If you are a homeowner, creditors may seek a charging order to secure their debt against your property.
• Money Advice Service can put you in contact with charitable organisations who will administer your DMP free of charge, however there are commercial organisations who will charge a fee. The fee will result in you repaying your debt for a longer period.

DEBT RELIEF ORDER

A Debt Relief Order (DRO) is a formal insolvency process that can help you deal with your debts if you owe less than £20,000, don’t own your home and have little spare income. DRO’s are an alternative debt solution to bankruptcy and usually last one year. Once you are in a DRO creditors are unable to recover their money without permission from the courts. Once discharged from your DRO, all the debts listed in your DRO will be cleared.

CRITERIA INCLUDING TYPES OF DEBTS

• You are unable to pay the debts you owe.
• You have £50 or less spare income each month (after normal household expenses).
• You must owe less than £20,000.
• You must not be a homeowner.
• You have less than £1,000 worth of assets (this excludes a car which you also own, if its value is less than £1,000).
• You have not had a DRO in the past six years and are not in another formal insolvency procedure.
• You have lived or worked in England, Wales or Northern Ireland for the past three years.
• Arrears on household bills such as rent, gas, electricity, telephone and council tax can be included, as well as consumer debts such as an overdraft, credit card or loan. Hire purchase or conditional sale agreements, items brought on finance and loans from friends and family can also be included in your DRO.
• Criminal fines, student loans, child maintenance service arrears, TV licence arrears, Social Funds loans or damages for personal injury ordered by a court cannot be included in a DRO.

COST

• The cost of a DRO is £90.
• Intermediaries are not allowed to charge you a fee for submitting your DRO application to the Insolvency Service.

ADVANTAGES

• You could clear your debt in a year.
• The cost of a DRO is much cheaper than bankruptcy.
• You won’t need to pay anything towards your debts for 12 months and after that your debt will be written off.
• A DRO is a formal procedure but the courts won't be involved in the process.
• Your creditors can't take any action over the money you owe.

DISADVANTAGES AND RISKS

• A DRO will stay on public record (Individual Insolvency Register) for 15 months and your credit record for six years.
• You'll be expected to pay back creditors if your financial situation improves.
• You can't get credit over £500 without telling the lender you have a DRO.

BANKRUPTCY

Bankruptcy is a formal insolvency route for individuals with serious debts that they cannot pay. Bankruptcy is a court driven process. Once you are made bankrupt you have a duty to provide information to the official receiver and the trustee and attend their office as and when required.

CRITERIA INCLUDING TYPES OF DEBTS

• You are in financial difficulty and your situation is unlikely to improve.
• You don’t have many belongings of value and you have little or no equity in your home.
• There is no minimum amount that you must owe.
• A creditor can apply to make you bankrupt if you owe them more than £5,000.
• You live or carry out business in England or Wales, or you have done so at any point in the last three years and live permanently in another European state (apart from Denmark).
• Magistrates court fines, any payments a court has ordered you to make under a confiscation order, maintenance payments and child support payments, student loans, secured loans, Social Fund loans, some benefits and tax credit overpayments cannot be included in the bankruptcy. Debts you owe because of the personal injury or death of another person will normally be excluded from your bankruptcy, although you can ask the court to order that you don’t have to pay them.
• Bankruptcy will not stop your mortgage lender from taking steps to repossess your home if you are behind on your mortgage. If your home is repossessed and sold but doesn’t raise enough money to pay off your outstanding mortgage or any other debt secured on it, the remaining debt will no longer be secured. This means you’ll be released from it at the end of your bankruptcy. You’ll also be released from it even if your home is sold at any time after your bankruptcy has ended.
• Debts obtained by fraud are excluded from bankruptcy, although your creditors can’t chase you for payment while you are bankrupt.

COST

• This is dependent on if you are applying for bankruptcy yourself or if someone you owe to applies to make you bankrupt. If a creditor applies to make you bankrupt, then there will be no upfront fees. If you apply for your own bankruptcy the following fees will apply:

In England and Wales:

The bankruptcy deposit is £550; and The adjudicator fee is £130.

In Northern Ireland:

The court fee is £115 (depending on your circumstances the court may waive the fee); The bankruptcy deposit is £525; and A solicitor’s fee, which is normally £7.

ADVANTAGES

• The experience isn’t usually as traumatic as it is perceived to be by the public in general.
• Most debt is written off and you gain a degree of freedom and a certain peace of mind.
• There will be no further creditor contact.
• You can keep basic possessions and the tools of your trade if you are self-employed.
• Once the bankruptcy period has come to an end, all debts are written off.
• Depending on your circumstances you may be debt free in 1 year.
• If you live in rented accommodation and you are up-to-date with your rent, you will be able to continue paying the rent. You have little to lose and ALL your debts will be written off at the end of the bankruptcy period.

DISADVANTAGES AND RISKS

• If you apply to make yourself bankrupt, there are fees.
• All your assets, apart from those required for a basic standard of living, will be sold.
• This is likely to, after a year, include your house.
• You will not be allowed to obtain more than £500 credit unless you first disclose that you are bankrupt.
• There are restrictions on the expenditure of an undischarged bankrupt and any income you have in excess of that needed for your basic needs will have to be paid to your creditors.
• Only unsecured debts included in the bankruptcy will be discharged at the end of the bankruptcy.
• Your job may be at risk: certain trades and professions will not allow you to work when bankrupt.
• Your credit rating will be affected (probably for some time after your bankruptcy ceases) and there may be other restrictions, such as having your bank and credit card accounts closed.
• Your bankruptcy will be advertised online and in the London Gazette.
• You will face uncertainty over lenders providing funds in the future after bankruptcy.
• If you are a tenant, you are unlikely to lose your home unless your tenancy agreement states you cannot rent the home if you are bankrupt.
• Once declared bankrupt your name and bankruptcy details will be published in the Individual Insolvency Register.
• Ensure you have enough cash for day to day expenses because once a bankruptcy order is made your accounts will usually be frozen.
• Being declared bankrupt would mean any application made for British citizenship, or to bring dependants to this country, would be likely to fail.

PROTECTED TRUST DEED PTD

A Protected Trust Deed is a legal arrangement between you and your Creditors which gives you protection from Creditors taking action against you to recover debts. You make an affordable payment each month for a set period, normally 4 years, and providing you keep to the arrangement your creditors will write off the rest of your debts at the end.

CRITERIA INCLUDING TYPES OF DEBTS

• You have more than £5,000 of unsecured debt.
• That you have 2 or more different creditors.
• In order for your Trust Deed to gain ‘protected’ status, your creditors must approve it, and there is always a risk that they might not vote to approve it. However, they don’t all need to vote in favour of the Trust Deed. You need a majority of your creditors to agree, and for those who object to own less than one-third of your debt.
• Arrears on household bills such as rent (but NOT mortgage arrears), gas, electricity, telephone and council tax can be included in your Trust Deed, as well as consumer debts such as an overdraft, credit card or loans.
• You are responsible for maintaining payments on your essential bills, including rent or mortgage and Council Tax. Court fines, student loans, mortgage arrears or money owed under family court proceedings cannot be included in the PTD and you are responsible for maintaining payments. These payments will be considered when calculating your disposable income.

COST

• No upfront fees are charged. There are Nominee’s fees and Supervisor’s fees. These fees are deducted from your agreed monthly contribution.
• If your PTD failed, the Nominee’s fees and Supervisor’s fees may be included as a debt and your creditors may back date any interest or charges accruing on your debts.

ADVANTAGES

• A PTD is a statutory contract, therefore providing legislative protection from creditors and any legal action they may otherwise pursue.
• A PTD consists of one affordable monthly contribution.
• All interest and charges will be frozen upon acceptance.
• Creditor contact is forbidden (other than annual statements).
• Debts included in your PTD could be cleared in 4 years.
• The time frame is set at the outset, this will only be subject to change should your circumstances improve or worsen.
• No upfront fees are charged, and the Nominee’s and Supervisor’s fees are deducted from your agreed monthly contribution.
• Homeowners will usually be able to keep their homes, provided they maintain the mortgage payments and other loans secured against their property.
• Once you have made your agreed final contribution into the PTD any remaining debt is written off.

DISADVANTAGES AND RISKS

• Acceptance of the PTD lies with the creditors. Should this be rejected, alternative solutions will need to be re-investigated with a qualified debt advisor.
• Your credit rating will be adversely affected.
• There are restrictions on the expenditure of a person who enters into an PTD.
• Your details will be entered on a public register.
• Homeowners entering into a PTD may be required to release equity from their property. Due to credit scoring it may be that the terms of such an arrangement are less favourable and remortgaging may result in a higher interest rate.
• Any debts that can’t be included in the PTD, will be your responsibility to pay, for example court fines, student loans or money owed under family court proceedings.
• Only unsecured debts included within the PTD may be discharged at the end of the period and unsecured debts not included remain outstanding.
• Should the PTD fail, creditors may back date interest on your debts or may request your Supervisor petition for your sequestration.
• Entering into an PTD is a statutory contract which would require you to obey the terms of the PTD. Failure to do so could mean that the Supervisor may petition for sequestration or terminate the PTD (which would leave the creditors free to pursue the debts).

DEBT MANAGEMENT PLAN

A Debt Management Plan (DMP) is an informal debt restructuring solution for unsecured debt. DMPs are provided by debt management companies and charitable organisations who could negotiate with your creditors to try to get them to accept the lower repayments and freeze any further interest that might otherwise be added to your current debt.

CRITERIA INCLUDING TYPES OF DEBTS

• You have unsecured debts that you can’t afford to repay.
• You have one or more creditor.
• You have a surplus income every month.
• Arrears on household bills such as rent, gas, electricity, telephone can be included in your DMP, as well as consumer debts such as an overdraft, credit card or loans.
• Hire purchase or conditional sale agreements and items bought on finance may be included in your DMP depending on the amount you have paid towards the items and the terms of the agreement.
• You are responsible for maintaining payments on your essential bills.
• Certain types of debt will not be included in the DMP. You will be responsible for paying taxes, fines, child support payments and debt which could result in loss of access to essential goods or services or repossession of, or eviction from your home. The payments towards these debts will be considered when calculating your disposable income.

COST

• There is an option to pay a fee for this service with a debt management company or you can seek advice and/or assistance from the free sector, such as a charitable organisation.
• Commercial Debt Management Companies charge a fee for their service. They should be taking no more than 50% of your payment for the first 6 months as a fee to set up the plan, and no more than 50% of your payment to administer the service for you from month 7 onwards.
• There are charitable organisations that administer DMP’s free of charge. The Money Advice Service provides details of organisations that provide free debt advice and services. For more information visit https://www.moneyadviceservice.org.uk

ADVANTAGES

• A DMP is an informal arrangement that avoids the need for formal insolvency procedures such as a PTD or sequestration.
• You make one monthly payment.
• By reaching agreement with your creditors, a DMP may suspend actions against you such as County Court Judgements.
• Creditors will, in many cases, freeze interest and charges.
• Your monthly debt repayments will be reduced to make them affordable.
• The service can be provided free of charge.
• You can cancel your DMP at any point.

DISADVANTAGES AND RISKS

• The arrangements are informal and are not legally binding so creditors could, if they choose, add interest and charges, or pursue other recovery action such as court action. They could also change their mind at any point.
• Your credit rating may be harmed. A DMP means you are making a reduced payment to your creditors and although this has been agreed to by your creditors it will still be noted on your credit file.
• While such arrangements reduce your monthly repayments to make them affordable, it usually means you will pay more in total over a much longer period.
• Interest or charges could be added to your debt, which means the total debt to repay will be higher, and depending on your level of payment, it could make the duration of the plan longer.
• Unless your level of debt is less serious you could end up in debt for a very long time. In the worst case you may find you have no real prospect of getting out of debt and becoming debt free.
• You must maintain payments to your essential bills. You are responsible for paying taxes, fines, child support payments and debt which could result in loss of access to essential goods or services or repossession of, or eviction from your home.
• Creditors may take further action to recover the debt which may involve additional costs or charges. If a creditor has already commenced recovery or legal action, there is no guarantee that it will be suspended or withdrawn.
• If you are a homeowner, creditors may seek a charging order to secure their debt against your property.
• Money Advice Service can put you in contact with charitable organisations who will administer your DMP free of charge, however there are commercial organisations who will charge a fee. The fee will result in you repaying your debt for a longer period.

DEBT ARRANGEMENT SCHEME (DAS)

A Debt Arrangement Scheme (or 'DAS') is a formal, government-run debt management solution established by the Scottish Government. A DAS allows you to repay your debts in a manageable way over an extended period of time.

CRITERIA INCLUDING TYPES OF DEBTS

• You must have more than one debt.
• You must habitually reside in Scotland.
• You must seek advice and assistance from a DAS approved money adviser.
• You must have a reasonable level of disposable income after meeting your basic needs
• Arrears on household bills such as rent (but NOT mortgage arrears), gas, electricity, telephone and council tax can be included in the Debt Payment Programme (DPP), as well as consumer debts such as an overdraft, credit card or loans.
• Criminal fines, student loans, child maintenance service arrears, TV licence arrears, Social Funds loans or damages for personal injury ordered by a court cannot be included in a DPP and you are responsible for maintaining payments. These payments will be considered when calculating your disposable income.
• You are responsible for maintaining payments on your essential bills, including rent or mortgage and Council Tax.

COST

• A charge is made to creditors for the payments distribution service and application fee
• Some DAS approved money advisers may charge a fee so it is worth checking this prior to seeking advice. Money Advice Service can put you in contact with charitable organisations.

ADVANTAGES

• It is legally binding on the creditors and is supervised by the Scottish Government.
• The creditors are forbidden from taking any further action against you to recover the debts owed to them.
• A DPP freezes all interest, fees and charges on the debt from the date the DPP application is made and these are written off when the DPP is completed.
• Creditors that do not accept the proposals can be forced to comply with the arrangement if it is judged to be “fair and reasonable”.
• If your circumstances change and you can no longer afford the payment or are able to increase your payment then you may apply for a variation.

DISADVANTAGES AND RISKS

• Your details will be entered on a public register if you set up a DPP (DAS Register).
• A DPP will affect your credit file and your ability to obtain further credit.
• A DPP exists until your debts are fully paid and there is no debt write off.
• A DPP can last for several years if you have large debts.
• If you do not comply with the conditions of the DPP then it may be revoked. Creditors are then free to pursue legal action and to add back on their interest, fees and charges if they wish.

SEQUESTRATION

Sequestration is the term used for bankruptcy in Scotland and is a formal insolvency process that involves that appointment of a Trustee to recover money from any assets you own which may include your home.

CRITERIA INCLUDING TYPES OF DEBTS

• You are in financial difficulty and your situation is unlikely to improve.
• You must owe a minimum of £3,000.
• You must have received advice from a money adviser.
• You must not have been sequestrated in the last five years.
• A creditor can apply for your sequestration if you owe them more than £3,000.
• you must be living in Scotland, have lived in Scotland or have established a place of business in Scotland, in the year immediately preceding the date of your application.
• Some debts cannot be included in sequestration such as maintenance payments and child support payments, student loans, secured loans, Social Fund loans, some benefits and tax credit over payments.

COST

• The cost for sequestration is £200 and is payable to the Accountant In Bankruptcy (AIB).

ADVANTAGES

• Creditors do not have an opportunity to reject the Sequestration.
• Once sequestrated, creditors cannot take legal action to recover their debt.
• You can keep basic possessions and the tools of your trade if you are self-employed.
• You no longer have to deal with the creditors – the Trustee will do this for you
• Interest, fees and charges are frozen – the creditors can only claim for the outstanding balance due as at the date of sequestration
• Once discharged from sequestration any debts included in your sequestration will be written off.

DISADVANTAGES AND RISKS

• Assets of a significant value are likely be sold for the benefit of creditors.
• It may harm your employment prospects both now and, in the future, – legal advice should be sought.
• You are unable to act as a director of a limited company or be involved in the formation, promotion or day-to-day financial management of a limited company.
• You are unable to act as a Member of Parliament or a Justice of the Peace.
• Your details will be entered on a public register.
• You may be required to make payments towards your sequestration under a Debtors Contribution Order (DCO) if you have a surplus in disposable income after paying for your basic needs. A DCO can last up to 4 years.
• Sequestration will affect your credit file and your ability to obtain further credit.

MINIMAL ASSETS PROCESS (MAP)

Minimal Asset Process Bankruptcy, also known as 'MAP' was introduced on April 1 2015 as a new route into bankruptcy for people with low income and minimal assets.

CRITERIA INCLUDING TYPES OF DEBTS

• You must have a minimum debt level of £1,500 and your total debt level must not exceed £17,000.
• You must not own or jointly own any property or land.
• You must not have a single asset worth more than £1,000 excluding a vehicle worth up to £3,000 which you reasonably require (for example for work purposes).
• Your total assets (excluding a vehicle) cannot be more than £2,000.
• You must have received advice from a money adviser.
• You must be living in Scotland, have lived in Scotland or have established a place of business in Scotland, in the year immediately preceding the date of your application.
• Some debts cannot be included such as maintenance payments and child support payments, student loans, secured loans, Social Fund loans, some benefits and tax credit over payments.
• You must not have been sequestrated in the last 5 years.
• You must not have been made bankrupt through MAP in the last 10 years.
• You must have received benefits for the last 6 months or been assessed as not required to make a contribution towards your sequestration.
• You must have a certificate for sequestration signed by a money adviser.

COST

• The cost of a MAP is £90.

ADVANTAGES

• You don’t have to make any payments towards your debt as you have no disposable income.
• All debts are written off after six months, as long as you have met all the requirements.
• You no longer have to deal with the creditors – the Trustee will do this for you.
• Creditors do not have an opportunity to reject the MAP if you meet the criteria.
• Creditors cannot take legal action to recover their debt.

DISADVANTAGES AND RISKS

• It may harm your employment prospects both now and, in the future, – legal advice should be sought.
• You are unable to act as a director of a limited company or be involved in the formation, promotion or day-to-day financial management of a limited company.
• You are unable to act as a Member of Parliament or a Justice of the Peace.
• Your details will be entered on a public register.​