Dealing With Debt

DEALING WITH DEBT - The COVID-19 pandemic has set everything in disarray and has brought many problems to society. In addition to health and societal problems, it also caused great financial stress on people. This has especially been the case for good and honest working folk, which have been seriously hampered by the lockdowns and lack of public traffic. Many of these people are insignificant debt because they have not been able to find any means to earn money. Even regardless of the pandemic, you have accumulated a large amount of debt because of rising personal costs for various reasons. If you are one of these people, we feel you.

You might be thinking, is there any way out of the loans you may have taken, like car and title deed loans? Not to worry, you might be eligible for government grants. We’re here to provide you with all the ways to get government grants for personal debt relief.

Let’s dive in.

Administration Orders

An administration order is an option to deal with debt if you have a High Court or county court judgment against you and cannot pay in full. The debt that you have must be less than £5000. You apply for an administration order with form N92, after which the court decides the arrangement of the debt relief. This includes:

• Amount of debt you repay
• How much monthly payments will be
• Length of arrangement

There are some eligibility factors you need to keep in mind, which include:

• Owing people less than £5000
• Owe at least two creditors
• Providing details of income to prove you cannot pay it
• Have a country or High Court judgment against you.

In such an arrangement, credits can’t take action against you unless permitted by the court. However, if you cannot repay this, the court can take measures against you. This includes a reduction of your wages and the cancellation of this arrangement.

Individual Voluntary Arrangements (IVA)

IVAs are agreements with your creditors to pay all or part of your accumulated debts. You need an insolvency practitioner for this debt relief option, to whom you will make the payments. The insolvency practitioners will then decide how the money is divided and pay it to your creditors. They will also work out how long they last and what you can afford to repay.

Therefore, you will have to give them details about assets, creditors, debts, and income representing your financial situation. They will contact creditors, and the IVA will only begin if creditors holding 75% of assets agree to it. They will also prevent creditors from taking any action against you for your debts. However, you still need to make payments because otherwise, the insolvency practitioner can cancel the IVA and may even bankrupt you. This will, however, not prevent you from running your business if you have one.

Breathing Space Scheme

The Breathing Space scheme is a debt respite scheme that gives you temporary protection from your creditors. It is important to note that this is only available in England or Wales. The scheme aims to help you develop a plan by receiving debt advice during this time.

This protection is only available for 60 days, but if you’re receiving mental health crisis treatment, then this can be longer. This is usually for the length of your treatment plus 30 days more. During this time, your creditors cannot contact you about debts involved in this scheme, and they cannot add interest or charges to it. In addition, there will be no enforcement action against you.

To apply for this scheme, you need to talk to a debt advisor who will apply for you. In addition, you can find a debt advisor for free on the Money Advice Service, where you can get confidential advice online, in person, or on the phone. If you cannot talk to a debt advisor due to mental health issues, someone else can do it on your behalf. It is free to apply for this scheme, but some debt advisors may charge you a fee. To be eligible, you shouldn’t have an IVA, DRO, interim order, or be bankrupt when you apply.

Summing up

If you have accumulated a lot of debt, you may be eligible for various government grants to help you with debt relief. We have discussed some of these and hope that they may help you out if you are under the stress of debt. Who knows, before long, you may be on the path to being debt-free and begin to grow out of it. We wish you luck!

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