Finance Blog

If you are in debt, it can be difficult to know exactly what your options are. There are numerous different options for you, it is important to decide what these are. Below are just a few of these options, which can help you to improve your financial situation:

1) Administration Order – If your creditor / creditors have a court judgement against you, and if your debt is £5,000 or less, then the county court is able to make an Administration order. Under this, you are required to make regular payments to your court, who will in turn pay your creditors. A fee will be charged for this, but it does stop your creditors being able to take any further action against you without asking the court first.

2) Informal Agreement – Try writing to your creditors to try and reach a compromise about an amount and time-scale in which you can repay the sum of money you owe to them. A benefit of doing this is that you reach a manageable agreement between you both without having to involve a court. A negative aspect to this is that the creditor may not be prepared to do it, instead taking a more forceful route to acquiring the money.

3) Individual Voluntary Arrangement – Also known as an IVA, this is basically a more formal version on the above, whereby you would apply to the court (with the help of an Insolvency practitioner), and they would then supervise the arrangement and pay your creditors in line with your agreement. Getting IVA help is sometimes a way to improve your chances of becoming debt free.

An IVA can be worked out to suit your personal circumstances more closely, so that you avoid going bankrupt. This suits both you and your creditors as they want to guarantee that their payments are still being made. Be sure to investigate all of these options closely, before deciding which is best for you.