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Find out more about Debt Help Solutions

Debt Relief Order

IVA – Individual Voluntary Arrangement

Bankruptcy

DMP (Debt Management Plan)

See below for more details on each solution

More information on the benefits and disadvantages of each solution below.

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Clearpath Debt Solutions specialises in offering Individual Voluntary Arrangements (IVAs) as a primary solution for managing debt. However, understanding that each client’s situation is unique, they also collaborate with trusted partners to provide a range of financial solutions tailored to your specific needs. Whether it’s an IVA or an alternative debt management plan, Clearpath ensures you receive the most suitable support for your financial circumstances.

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You could include the following debts:

Overdrafts

Credit Cards

Payday Loans

Store Credit

Personal Loans

HMRC

Catalogues

Credit Contracts

Check My Options

May not be suitable in all circumstances. Your credit rating may be affected. Fees apply on successful applications which will be advised and built into your payment plan.

☑ Stop Creditors Contacting You

☑ Unaffordable Debts Written Off

☑ Consolidate & Reduce Repayments

☑ Interest & Charges Frozen

We will generally ask you a few questions and advise you on what options are available to you with some short videos to explain them in more detail.

What Are My Options

If a plan is agreed then fees will apply with full transparency. Your credit rating may be affected. May not be suitable in all circumstances.

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Find out more details on Debt Options

Debt Relief Order

DRO Benefits
No Monthly Repayments

No monthly repayments for 12 months.

100% of Unsecured Debt Written Off

100% of your unsecured debt will be written off.

Legal Protection from Creditors

You are legally protected with a Debt Relief Order.

DRO Considerations
DRO Added To Individual Insolvency Register

Your DRO will be added to the individual insolvency register. This will be removed 3 months after the DRO end period. The DRO will remain on your credit file for 6 years.

Restrictions On You

There is a list of restrictions you must follow when in a DRO solution;

  • If you borrow money to the value of £500 or greater, you must inform the lender that you have a DRO.

  • You cannot start or promote a company without prior approval form the court.

  • To manage a business without telling them about your DRO, you must check the individual insolvency register to see when the restrictions have ended. Restrictions usually last the duration of the DRO which is 12 months. They can be extended however if you have had behaviour issues that have caused your debt problem. 
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About DROs (Debt Relief Order)

DRO or Debt Relief Order is a formal debt solution that lasts 12 months; You can apply and if successful, be approved by an intermediary advisor. A DRO is sometimes a more viable option but you need to meet certain criteria in order to qualify for this solution. We recommend people consider their eligibility for a DRO before applying for an IVA.

How exactly does a DRO work?

Your personal debt circumstances will be assessed by an advisor, including your total assets vs your monthly income. If your debt exceeds the £50,000 limit, a car over £4,000 or have assets over the amount of £2,000 then you are probably unlikely to qualify for a DRO solution, however, we will advise you on alternative debt solutions that you may suit your financial position.

If you are applying for a DRO, an advisor will work with you to aid you with your application before submitting to a Insolvency practitioner. There is no upfront fee when applying for a DRO. We can advise you if you qualify before having to make any payment.

With an approved DRO, there is a 12 month period of which you wont need to make any payments during this time. You are legally protected against your creditors who will not be able to take any action against you.

A DRO is complete after 12 months and all debts that were in your plan will be written off. You can find out more about what debts can be included by making an enquiry.

A DRO is only available in England and Wales.

Individual Voluntary Arrangements (IVA)

There are advantages and disadvantages to having an IVA – let’s break both of those down:
IVA Benefits
One affordable monthly payment
All of your necessary living costs will be taken into account before an IVA payment plan is agreed.
Stop interest and charges
Once you have your IVA approved, any interest and / or charges are frozen. These can’t and won’t be added to your debts by your creditors, preventing the debt amount from increasing.
Write off a significant percentage of your debt

Typical IVA duration lasts 5 years, but can impact your credit for up to 7 years.
update all solutions as appropriate. Provided your agreement is adhered to, your remaining unsecured debt will be written off.

Protect your home and vehicle
Essential assets such as your home or vehicle are usually protected during an IVA. You may retain these, provided they are of a reasonable value.
Stop worrying calls and letters from your creditors
Once your IVA has been accepted by creditors, they are bound, by law, to no longer contact you requesting payment directly. The Insolvency Practitioning team administering your IVA will deal with creditors on your behalf.
Stop court and bailiff action
Provided you are sticking to your IVA terms, creditors are not entitled to take any legal action against you – including sending bailiffs to visit you.
IVA Considerations
Your creditors must agree to an IVA

A high proportion of IVAs proposed are accepted however your creditors do have to agree to an IVA, therefore we can’t guarantee it.

It will affect your monthly budget(s)

An IVA is a formal arrangement, so you do need to comply with the terms for it to work. The monthly payments will be affordable and sustainable but are likely to mean quite a tight budget while the debt is repaid.

It will affect your Credit Score

It will affect your credit score. IVAs remain on your file for 5 years from the date your creditor agrees to it or until your IVA is finished, if it lasts longer than six years meaning that even if you complete it within five years, it can show up on your record for another 12 to 24 months.

Your IVA will be listed

Your IVA will be listed on the Individual Insolvency Service register.

You pay fees to your IVA company

You will pay fees to the IVA company, although they will often be factored into your affordable monthly payments.

About IVAs 

An Individual Voluntary Arrangement (IVA) is a legally binding agreement made between the applicant and their creditors to pay back a percentage of their debts. In order for an IVA to be accepted, a number of your creditors must agree to the repayment plan in order to have a successful application.

How exactly does a IVA work?

An IVA allows you to merge multiple debt payments from various creditors into a single affordable monthly payment. These monthly payments will be divided among your creditors. Unlike a Debt Relief Order, an  IVA can protect your mortgage, vechicle and other assets of value when in a plan.

A typical IVA will usually last 5 to 6 years, and stay affect your credit for 1-2 after completion – provided that you have stuck the terms set out in your IVA; your debts will be written off and marked paid in full.

An IVA is only available in England and Wales.

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Bankruptcy

Bankruptcy is a legally binding debt solution to resolve a debt problem that cannot be resolved. In Scotland, this is sometimes called sequestration.

Bankruptcy Benefits
Duration

Bankruptcy often lasts for only 12 months in total.

Legal Protection

Once approved, creditors can no longer proceed with legal action against you.

Peace of Mind

Creditors are no longer able to contact you regarding your debts.

Interest & Charges

Interest and charges are frozen once the bankruptcy application has been approved.

Bankruptcy Considerations
Assets

If you own a home or possessions of significant value, these items could be sold to help repay your debts.

Fees

There is an application fee of £680, although this can be paid in installments.

Payments

You could be asked to make payments towards your debts for a period of up to 3 years.

Credit Rating

Bankruptcy will be recorded and have a negative impact on your credit file for a period of 6 years.

Public Register

Your personal details will be recorded on the Insolvency Register which is a public record.

Employment

Bankruptcy may impact your employment; therefore, you should always check the terms of your employment contract before making an application. You are also unable to be a company director unless you have permission from the court.

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If you wish to see if you are eligible for Bankruptcy, our expert team of Advisors are here to help.

Debt Management

A Debt Management Plan (DMP) is an informal agreement between you and your creditors that has been negotiated, usually by a third party, to lower the monthly payments being paid to your creditors. A DMP is arranged on your behalf by a third party which can either be a debt charity or a fee charging company. If you chose to use a fee charging company, there will usually be set up fees and a monthly management fee which will normally be included within your monthly payment.

DMP Benefits
Affordable

One affordable monthly repayment which is then distributed between each of your creditors.

Peace of mind

Most contact from creditors will be dealt with by the Debt Management company on your behalf.

Interest & Charges

Creditors may agree to reduce or freeze interest and charges, although this is not guaranteed.

Free Service

Debt charities offer a Debt Management Plan free of charge. Find out more from the Money Advice Service.

DMP Considerations
Timescales

One affordable monthly repayment which is then distributed between each of your creditors.

Fees

A debt management company may charge fees for their services.

Priority Bills

Such as rent, council tax and utility bills are unlikely to be included in the plan.

Credit Rating

A Debt Management Plan is likely to have a negative impact on your credit rating, making it more difficult to obtain credit in the future.

No Legal Protection

Creditor can choose to continue with their debt collection process, which can lead to further action such as a default or County Court Judgment.

Check Your Options

If you wish to see if you are eligible for a Debt Management Plan, our expert team of Advisors are here to help.