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The main solutions

Debt Management

Debt Management is a potential financial solution that could allow you to reduce your current monthly payments to your unsecured creditors to a more affordable amount without having to borrow more money.

In the majority of cases, the creditors will accept the proposal and agree to freeze the interest.  The client has the responsibility of making one payment to Personal Touch Debt Solutions who then distribute the payment to the creditors.  The client is still responsible for paying off the amount owing to the creditors over an extended period

A client can enter into a debt management programme immediately.

Individual Voluntary Arrangement (IVA)

If the client has 3 or more creditors and owes more than £15,000 in unsecured debt, it is likely that this solution may be the most suitable for the circumstances. In addition, the client must be employed or self employed (able to prove income) and have surplus income of £275 per month after taking into account all expenses. An IVA is a legally binding agreement and normally runs up to 60 months.  The IVA is managed by an Insolvency Practitioner who needs to obtain agreement from a minimum of 75% of the creditors before proceeding.

The Insolvency Practitioner will request the creditors to accept the proposal of a reduced payment once they have confirmed the information on the affordability statement is incorrect.  The interest will be frozen on all accounts.

Bankruptcy

Bankruptcy is one way of dealing with debts that cannot be paid and is a possible alternative to other debt solutions such as debt management and IVA.

In most cases, becoming bankrupt is considered as a last resort solution as there are many implications and disadvantages. Any enquiry or proposal for bankruptcy is passed to a solicitor who will contact the client and discuss the implications.

Full and final settlement

 A "full and final settlement" is when we act on behalf of the client and ask the creditors if they will accept a lump sum payment which is less than the full balance that is owing on the debt. In return for having a lump sum payment the creditor agrees to write off the rest of the debt.