Compare debt solutions
Sometimes it can be confusing when trying to decide which debt solution is right for you. The following comparison table is a quick guide to the more regularly used debt solutions, and could help you clarify key questions.
Please note that this comparison table is not intended as a means to decide the right solution for your money problems.
You should only decide the right way forward after a full discussion with our experts at National Money; call us on 08448 247 260
| Bankruptcy | Consolidation Loan | Debt Management Plan | IVA | |
|---|---|---|---|---|
| Will my debts be cleared within a fixed period that is agreed from the start? | YES |
YES |
NO |
YES |
| Will interest be frozen so that my current debts don’t get any bigger? | YES |
NO |
NO *1 |
YES |
| Can I change my payments if I have an unexpected expense? | NO |
NO |
YES |
YES |
| Do I still have to deal with my creditors myself? | NO |
YES |
NO |
NO |
| Will this affect all of my assets? | YES |
NO |
NO |
YES |
| Are my creditors likely to accept less than I owe them? | YES |
NO |
NO *2 |
YES |
| Will I avoid losing the home I own? | NO |
NO *3 |
YES |
YES |
| Am I protected by law from my unsecured* creditors? | YES |
NO *4 |
NO |
YES |
| Will my creditors stop chasing me for payment? | YES |
YES |
NO *5 |
YES |
| Will my creditors consider that I’m trying to do the honourable thing over my debts? | YES |
YES |
YES |
YES |
| Do I keep control of the settlement situation? | NO |
YES |
YES |
YES |
| Is the procedure confidential, preventing others from knowing my situation? | NO |
YES |
YES |
YES *6 |
| Does my partner have to know? | YES *7 |
NO |
NO |
YES *7 |
| Will I avoid social stigma? | NO |
YES |
YES |
YES |
| Is the procedure administered by a licensed Insolvency Practitioner? | YES |
NO |
NO |
YES |
| Can my creditors be legally forced to go along with my chosen course of action? | YES |
NO |
NO |
YES |
Notes:
*1: Because of the informal nature of the solution, the success of a Debt Management Plan is influenced by the relationship between the debt management provider and the creditors, and the debt management provider’s reputation for proposing fair and reasonable payment offers. A good debt management provider, such as National Money, is likely to gain agreements to cease, or at least significantly reduce, the interest and other fees levied by creditors.
*2: As in Note 1, creditors are likely to accept payment offers at levels lower than set out in the initial Credit Agreement where these are considered to be fair and reasonable in the client’s circumstances.
*3: There is a risk that you could lose your house where loan repayments are not maintained, particularly if you have given a legal charge (mortgage) over your house as security for the loan.
*4: A Consolidation Loan does not protect from recovery/legal action taken by creditors where you fail to maintain the contractual repayments on the due dates.
*5: It is likely that creditors will continue to make contact either by post or telephone during the first couple of months of a Debt Management Plan. However, payment offers made to creditors by reputable debt management providers should ensure that such contact falls away very quickly once the creditors start to receive payments as promised.
*6: Unlike Bankruptcies, IVAs are not published in the local newspaper and for all intents and purposes are confidential to all but those determined to find out. An IVA must be registered by the Insolvency Practitioner through the Secretary of State on a centrally held Insolvency Register until it has been completed. This Register can be inspected by the general public upon request.
*7: This depends upon whether there are joint debts, or there is a property in joint names with your partner. Where there is a house in joint names with your partner, your partner will need to be made aware, because a ‘restriction’ will be placed on the Land Registry against the property which prevents its sale.
Call us for Debt Management help and advice on:
08448 247 260
Or ask us any Debt Management questions using the form below:
