At Invocas, we strive to provide sustainable debt solutions which will deliver real benefit to both the debtor and creditor. Our free debt advice offering, Newtomorrow, offers a wide range of financial solutions and can advise on the best course of action depending on each individual's unique financial circumstances. For more information please visit www.newtomorrow.com.
Bankruptcy and Sequestration
Bankruptcy (or Sequestration as it is known in Scotland) is the most severe form of debt relief available and places a number of restrictions on the indebted individual. For more information about Bankruptcy please click here. To find out more detailed information about Sequestration then please click here.
An IVA or Trust Deed may allow the indebted individual to avoid bankruptcy and will generally result in an improved return to creditors.
Individual Voluntary Arrangement
An Individual Voluntary Arrangement (IVA) is available in England, Wales and Northern Ireland. Because of the complexities of an IVA, it is generally not suitable for individuals with debts of less than £15k. A simplified version, known as a Simplified Individual Voluntary Arrangement (“SIVA”) has been proposed by Government and will be suitable for individuals with lower levels of debt when it is introduced sometime in 2008. For a more in-depth look at IVA’s please click here.
Protected Trust Deed
A Protected Trust Deed, where a debtor places assets and/or a proportion of income in trust for creditors, is a very popular solution in Scotland. For a more comprehensive explanation about Trust Deeds please click here.
Formal debt relief may, in fact, not be required in many cases and there are a number of other alternatives that should be considered.
Debt Management Programme
A Debt Management Programme allows a debtor to pay one affordable monthly payment to a debt management plan which is then distributed to creditors. This solution is likely to be appropriate where debts are below £15k. For more information about Debt Management Programmes please click here.
Remortgage
If there is significant equity within a debtor's home, a remortgage could be considered. Due to rising house prices a debtor’s home, if they own one, may have substantially increased in value. This means the equity could be released to pay off other debts. For more detailed information about remortgages, please click here.
Full and Final Settlements
If the equity available from a remortgage is not sufficient to pay off all other creditors in full, it may well be possible to propose a Full and Final Settlement to creditors, who will usually expect to receive at least 65% of the amount due to them. If the equity will allow a repayment of less than 65% a Full and Final Settlement may still be possible in combination with an IVA or Protected Trust Deed.
Loan Restructuring
A loan can sometimes be the most appropriate option for dealing with debts. All debts can be consolidated into one manageable loan with one monthly payment, often at a much lower rate of interest. For more information about loan restructuring please click here.
Before we recommend any course of action we carry out a full independent review of all our clients' financial circumstances to ensure the most appropriate solution is proposed. It is imperative that full disclosure of assets, liabilities, income, expenditure and any creditor action is made in order for us to help to identify the most appropriate solution.