Knee deep in debt? 3 legal solutions you should look for
Having trouble paying your bills? Read on!
12:17 31 July 2014
Are you considering bankruptcy? People who are in a financial rut seek legal solutions for their debt issues. This article discusses some of the common legal solutions you can turn to redeem yourselves.
1.Debt Relief Order(s), DRO
A Debt Relief Order (DRO) is issued by the Official Receiver who works under the bankruptcy court and once you get it; your creditors should not ask you for repayment without a written permission from the competent body. Debtors must submit their application for a DRO only through an approved debt consultant. DRO is one of the best ways to settle up debts so long as they do not exceed £15,000. Other prerequisite factors for one to qualify for a DRO include that you should not own your house and have minimal monthly savings. You are recommended to submit your application through an authorized financial advisor who specialises in debt.
2.Individual Voluntary Arrangement, IVA
An Individual Voluntary Arrangement, IVA refers to an agreement made between a debtor and his creditor(s) where the debtor is required to repay either the total debt amount or a part of it. Debtors are required to make regular payments to an insolvency practitioner who then distributes the amount amongst the creditors to whom the debtor is owed to. It is important to note that an IVA is only administered by an authorized insolvency practitioner. It is in the jurisdiction of the insolvency expert to decide on the duration of the IVA and the amount the debtor is going to pay for debt setlement.
With an IVA agreement, debtors are required to disclose some details including the assets owned by the debtor, the various debts s/he’s obligated to, income and the creditors s/he’s indebted to. The debtor will also have to settle two fees with the insolvency practitioner; firstly for the IVA arrangement and secondly for handling the regular (monthly) disbursements.
3.Fast – Track Voluntary Arrangement, FTVA
Debtors can also opt for the FTVA if a court of law has declared them bankrupt. In this arrangement, the court sells off a debtor’s assets and uses the proceeds to pay off creditors.