jonny-caspari-DVzt7cvRKRo-unsplash (1).j

Sometimes asking for help when you are in financial difficulty is the hardest step to take. 

Here at The Debt Advice People we can make that first step as stress free as possible and get you well on the way to resolving your difficulties

We have advisors on hand to talk to you or if you prefer we can see you in person.


We can assess your circumstances to see if you need some small changes to get back on track or whether a more formal solution is needed. 

Read about the different solutions below.


You can also download our

debt solutions guide here

Budgeting Advice

      Being in financial difficulty can be a tough situation to deal with. It can make you feel isolated and cause sleepless nights. The emails, letters and phone calls from companies chasing you for payment can sometimes be overwhelming meaning most people in financial difficulty are at risk of being in a vulnerable situation. This can mean making rash decisions about the best way to deal with debts. The good news is you are not alone and sometimes all that is needed is an organised step by step approach that you can follow.

      Step 1:

      Make a list of all the people and companies you owe money to and list the total amount you owe them and the expected amount you must pay them each month. This will give you an idea of the total amount of debt you owe and the total amount you need to pay each month to keep on top of the debts. Don’t include any secured debts at this stage (Mortgages, Secured Car Finance etc) but do include any arrears you have on priority bills (Council Tax, Rent, Utility Arrears)

      Step 2:

      Now work out your monthly income and expenditure. Write down the total income you have coming in each month and the total amount you must pay out each month. Try not to underestimate how much you spend each month and use your bank statements to help you do this. At this stage Don’t Include any payments to your unsecured debts (Do allow for payments to secured debts and ongoing priority bills such as Council Tax). You will now be able to see if you can meet the total payments expected each month for your debts.

As an example, if your total payments to your debts came to £500 but you only had £250 left after paying your living costs then its possible you may need some form of debt advice and possibly a debt solution.

If you had £500 left over, you may not need any assistance. Just double check your calculations are correct, if you would feel more comfortable having someone check your figures don’t be afraid to ask for help


                    Click on the PDF Icon to download the SFS Budgeting sheet to help with steps 1 & 2


      Step 3:


      If you can’t meet the contractual debt payments its then a case of understanding how far off the payments you are. If its only a small amount is there any changes you can make to your lifestyle to allow you to pay more. This could be shopping at a different supermarket or taking packed lunches to work.


You can also the Entitled To website ( to check if you are claiming all income available to you. You can also look at your utilities and media packages. Contact your suppliers to see if you can get a better deal or use a comparison website such as Uswitch ( to try and reduce your outgoings.

If you still can’t meet the debt repayments, then its best to seek expert advice. Even if the problem is only a short-term issue, speaking to an experienced debt advisor will give you the peace of mind you need and help you take back control of your finances. It may be a case you need to consider a formal debt solution. The solutions available to people living in England, Wales and Northern Ireland are explained in more detail below. 

Debt Management Plan (DMP)

      A Debt Management plan is a non-legally binding agreement between you and your lenders to repay unsecured debts. It reduces the amount you pay towards debts, such as personal loans, credit and store cards and overdrafts to an affordable amount each month. It leaves you with enough money to cover priority bills such as rent or mortgage, and debts not covered by the plan for example secured loans or Hire Purchase agreements.


      There are both free and fee charging companies that offer Debt Management Plans. Fee charging providers will typically charge a minimum fee per month and/or a percentage of the monthly payment you make. Please note using a fee charging debt management provider will take longer to pay the debts off in full.


  • You’ll have a single, lower monthly repayment designed to fit around your essential bills and outgoings.

  • Your provider will deal with your lenders for you, handling all negotiations, correspondence and phone calls.

  • Your provider will ask your lenders to freeze the interest and charges on your unsecured debts.

      Cons and risks:

  • It’s not guaranteed that your lenders will accept a lower monthly repayment, or freeze your interest and charges, but if your offer is reasonable, the majority will.

  • Because you’re repaying less every month, it could take you longer, and cost you more, to clear your unsecured debts.

  • Your ability to obtain credit will be affected for the short to medium term.

Individual Voluntary Arrangement (IVA)


      An IVA is a legally binding solution that enables you to repay your lenders as much as you can realistically afford, usually over a five year period.  At the end of this time, your remaining unsecured debts (credit and store cards, personal loans and overdrafts for example) would be written off, this only applies to the debts included in the IVA. Any debts not included would not be written off. You would then be left with enough money to cover debts not covered by the IVA such as secured loans and Hire Purchase agreements and pay your priority bills, such as rent or mortgage and other essential outgoings. An IVA is only available if you reside in England, Wales or Northern Ireland (An IVA is not available in Scotland but there is a Scottish equivalent known as a Trust Deed).


If you’re a homeowner, you usually won’t have to sell your home, but you will have to attempt to re-mortgage to release equity in it. If you cannot, your monthly repayments will be extended up to 12 months.



      IVA fees will only be charged if your IVA is accepted by you and your lenders. Once your IVA is accepted, the fees you pay will be:


      Nominee Fee:

      The Nominee Fee will typically be between £1,000 and £3,000 and is taken from your monthly contributions. The Nominee Fee will be paid first, before any funds are distributed to your lenders. This is the normal and expected practice when starting an IVA.

      Supervisors fee:

      The Supervisor Fee is normally charged at percentage of any funds received and as agreed with your lenders. This can typically be between 15% and 18% of the total funds paid into the IVA

      Costs & Expenses:

     The cost of certain expenses will be reclaimed, such as postage, insurance, etc., in connection with the running of your IVA.

The amount of fees charged will be clearly set out in your IVA proposal. They must be approved by your lenders who may ask for changes before they accept them.


  •  You’ll have a single, lower monthly repayment that takes into account payments to your essential bills and outgoings.

  • Most IVAs last a fixed term – 5 to 6 years – so you’ll know when you’ll be free of the unsecured debts included in it.

  • The remaining unsecured debt included in your IVA is written off when your IVA is successfully completed.

      Cons and risks:

  • There is a risk that if your IVA fails, it could lead to bankruptcy, lenders can chase you for the debt and interest suspended can be added  .

  • Details of your IVA will be accessible on the Insolvency Register.

  • Your ability to obtain credit will be affected for the medium to longer term.

  • Homeowners may need to release equity from the value of their homes to pay off debts, and a remortgage may attract higher interest rates or, if no remortgage is available, an IVA may be extended for 12 months

  • Expenditure can be restricted to a level creditors would deem reasonable

  • Your creditors will need to approve the IVA. If they do not approve the IVA it will not be implemented.


      Bankruptcy is a legal binding procedure which can help write off debt that you realistically cannot afford to repay. If appropriate, you would usually be discharged from Bankruptcy after 12 months, however, you may be required to pay towards your bankruptcy for up to 3 years. It can be the most suitable solution for some people, but it is a serious step with wide reaching financial implications. Bankruptcy is not available in Scotland, a different solution called Sequestration is the Scottish equivalent to Bankruptcy.

It usually covers your unsecured debts, such as personal loans, credit and store cards and overdrafts; and leaves you with enough money to cover debts not covered by bankruptcy such as secured loans, Hire Purchase agreements and other essential outgoings like mortgage or rent.




      The fee in England and Wales is £550 for administering your Bankruptcy, plus £130 for the adjudicator costs. To apply for Bankruptcy you will need to complete an on-line application and submit this to the Insolvency Service where an adjudicator will then consider your application.

In Northern Ireland You will need to apply to the High Court for your Bankruptcy and your local Citizens Advice Bureau can assist you with this process. There are three fees that you will need to pay when you take your petition to the Court: 1. A fee of £525 towards the costs of administering your bankruptcy 2. The Court fee of £115 (this fee may be waived in some circumstances, the court staff will be able to advise you) 3. A fee payable to a solicitor relating to the Statement of Affairs, which costs approximately £7.



  •  You will usually be free of your unsecured debts after 12 months, but if you can afford to do so, you will need to make payments into your bankruptcy for 3 years.

  • If you are in receipt of benefit only income you will not be expected to make payments into the Bankruptcy.

  • A chance to make a fresh start with your finances once your bankruptcy has finished.

  • Your unsecured lenders are not allowed to take any further action against you.


      Cons and risks:

  • Your home (if you own one) and valuable assets may be sold to repay your unsecured debts.

  • Details of your bankruptcy will be accessible on the Insolvency Register.

  • Your ability to obtain credit will be affected in the short term to medium term, and is likely to be affected in the longer term.

  • You may have to disclose your bankruptcy in future applications for credit, or to potential employers.



Debt Relief Order (DRO)


      A DRO is a form of insolvency that offers a way to write off your unsecured debts if you owe less than £20,000, have limited spare income and minimal assets. If you own a vehicle it must be valued at less than £1000 and you must not own any other assets that are worth more than £1000. If your financial situation is unlikely to improve in the near future it could be an option for you, and you wouldn’t be required to make any repayments to the debts included in the DRO. A DRO is only available if you reside in England, Wales or Northern Ireland (A DRO is not available in Scotland but there is a Scottish equivalent solution known as Minimal Assets Process (Map)).



      The administration fee to apply for a DRO in England and Wales is £90. Which is payable to the Official Receiver. You are only able to apply for a Debt Relief Order (DRO) through an Approved intermediary. To find out more about DROs and to find an Approved intermediary visit:



  • Your unsecured debt repayments will be frozen for 12 months.

  • Your unsecured lenders are not allowed to contact you.

  • The debt included in the DRO will be written off after 12 months.


      Cons and risks:

  • If your circumstances improve in those 12 months, the DRO would end and you would have to repay your unsecured debts, including any interest that has built up over that period.

  • Details of your DRO will be accessible on the Insolvency Register.

  • Your ability to obtain credit will be affected for the medium to longer term.