Most people facing debt feel overwhelmed partly because the language around it is deliberately confusing. These articles are our attempt to cut through that — plain explanations of the options, written by people who have used them to help clients for over 20 years.
Personal Debt Options
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Which debts are included and excluded in different solutions?
Not all debts qualify for every solution. Some debts — HMRC arrears, court fines, student loans — sit outside most arrangements entirely. Understanding which of your debts are in and which are out is the starting point for any realistic plan.
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Creditor arrangement or DMP — what is the difference?
Two tools are very similar; informal, flexible, often resulting in interest and charges being frozen. The key difference is you retain control of payment with a creditor arrangement and that of itself is empowering in a situation where you may feel powerless.
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What is a partial settlement?
A negotiated settlement lets you clear a debt for less than the full amount — here is how it works and when it is appropriate. Creditors will sometimes accept less than the full balance, particularly on older or sold-on debts. But the timing, the approach, and the wording of any agreement matter enormously.
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What is an IVA?
An Individual Voluntary Arrangement has to be considered carefully. It is a formal insolvency procedure with real consequences for your credit record, your assets, and your financial life for the duration. For some people it is the right answer — for others, a less drastic option will do the same job.
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What is a full and final IVA?
A variation of the standard IVA designed for people who can offer a lump sum rather than monthly payments over time. The lump sum is typically less than the total debt owed, and once accepted, the balance is written off. How it is structured is crucial.
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What is bankruptcy?
An introduction to bankruptcy. It is one of the most misunderstood debt solutions — feared by some people who would actually benefit from it, and pursued by others for whom the consequences are more serious than they realised. This article sets out what it actually involves.
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What is a DRO?
A Debt Relief Order is a low-cost alternative to bankruptcy for people with few assets and a low income. It freezes your debts for twelve months and, if your situation has not changed, writes them off at the end. Eligibility criteria are strict and worth checking before assuming it applies to you.
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What is Breathing Space?
A legal protection that pauses creditor pressure while you find a way through. But it can only be accessed through a debt adviser — and the detail of how it’s applied matters enormously.
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Bankruptcy
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What is bankruptcy?
An introduction to bankruptcy. It is one of the most misunderstood debt solutions — feared by some people who would actually benefit from it, and pursued by others for whom the consequences are more serious than they realised. This article sets out what it actually involves.
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