open-finance.co.uk

Open Finance Debt Solutions Ltd offers free debt assistance throughout the UK. We will inform you about all possible debt relief solutions and we will indicate what we believe suits your situation best and in the best and fastest way will lead to your total debt. Our company is regulated and licensed by the British Financial Supervision Authority (FCA), which guarantees the highest quality service.

Services offered by us can be helpful if you:

• Have been involved in an accident which has led to financial difficulty
• Redundancy and the implications it brings for handling finances and making ends meet
• Heve suffered to death for the loved one
• Who are currently being harassed by creditors

 

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Consultation with our helpline, as well as all our services are free.

 We will never charge you. We can offer our service in both English and Polish.

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The Money Advice Service is an impartial service set up by the Government. For free debt counselling, debt adjustment and credit information service, visit  moneyadviceservice.org.uk

 

It is a debt solution introduced by the UK government in the 1986 year as an alternative to Bankruptcy. It is a legally binding agreement (usually lasting five years) between the debtor and the all creditors. The contract consists in the fact that the trustee it will set a monthly amount that he could reasonably pay your creditors after deduction of all your bills and expenses. All interest and additional fees are retained. You do not have to sell your home or car, and the creditors can not continue to collect debt from you. After joining the IVA, the appointed amount must be regularly repaid to the trustee. After accepting the IVA, the receiver collects his/her margin for running the case, which is always included in the monthly installment.

The advantages of an IVA

• IVA allows you to repay as much of your unsecured debt as you can over a typical sixty months period, which could mean a part of the debt is written off
• You do not have to sell your home or car (in case of a significant valueadditional payment to IVA may be required)
• Interest and additional fees related to debts will be retained
• Your creditors are legally prohibited from taking any further enforcement action such as petitioning for your Bankruptcy
• By repaying what you have agreed to, you can emerge with your finances back on track

The disadvantages of an IVA

• You must keep up payments for five years or risk Bankruptcy (any fees you’ve paid up to that point will not be recoverable)
• In the case of a significant house value, you must pay an additional sum to IVA (applies only to property owners)
• The payments you make can go up if your income increases or if your expenditure reduces during the five years
• The IVA may affect your credit rating for a period of six years from the date the IVA begins. Your credit score may fall down to zero or it may cause inability to borrow during the time the IVA is in place

Before the introduction of IVA and DRO, it was often the only possible debt relief solution. By announcing bankruptcy, all unsecured debts (without student loan) will be canceled within 12 months. However, the court may order the repayment of obligations up to three years, paying off each month the percentage of the so-called disposable income. Bankruptcy has a number of negative consequences that should be carefully considered before making a decision and should be consulted with an independent trusted adviser. Filing for bankruptcy costs £680.

If your home has a so-called equity (applies to homeowners and mortgage) the case will be directed to the so-called Official Receiver who will want to sell the property and recover some of the money.

In extreme cases, where reckless or dishonest behaviour can be established, a Bankruptcy Restriction Order (BRO) can be made which extends the imposition of Bankruptcy on individuals for a period of between one and three years.

You can sometimes be forced into Bankruptcy if your debts are over £5000 and you have frequently missed payments, or if you have broken the terms of an Individual Voluntary Arrangement (IVA). Some people choose to declare bankruptcy themselves but you need to explore all other options very carefully first.

The advantages of bankruptcy:

• Your unsecured debts will be written off
• You will not do anything directly with your creditors
• You will have so-called a fresh start after just a year
• Creditors will stop contacting you

The Disadvantages of Bankruptcy

• You can lose your home if there is a so-called equity
• You may have to sell your car or convert to a cheaper model
• You will not be able to take a mortgage
• The court may enforce an ‘income payments order’ for three years if it deems it necessary

This is an informal agreement between you and the creditors you owe money to. This means that, unlike IVA, DRO or Bankruptcy, its findings are not legally enforced. In DMP, you may be able to negotiate lower repayments over a longer period of time, but it is important to realize that your creditors are not legally obliged to agree to your offer, freeze interest, or suspend any ongoing legal action. Therefore, it is important to get unbiased advice on whether the DMP is the right solution in your situation.

You can negotiate DMP terms with your creditors yourself or use the services of a specialized company that manages your debt.

There are two main types of DMP:

• Fee charging – which is where you pay a management fee, typically between 10% to 15% of your monthly payment. Companies that charge fees argue that they provide a superior service, which justifies the additional cost.
• Non-fee charging – which is where the full amount of your monthly payment goes towards paying off your debts. Because there is no monthly management fee to pay, your debts will be paid back sooner than if you used a fee charging company.

Advantages of DMP

• Possibility to set smaller monthly payments

• Some creditors may agree to retain interest

• Your home is not at risk if you can keep up payments.

• None of your family, friends or colleagues need to know about this solution

Disadvantages of DMP

• This is not a legally binding contract

• Not all creditors agree to retain interest

• The payback period will increase (you must make sure you’re happy with this).

• All fees related to running the DMP will increase your debt

 

 

 

Debt relief solution that has many similar advantages and disadvantages to Bankruptcy. As a rule, it lasts for one year during which creditors can not pick you up or claim your rights towards debt. After this period you will be free from all debts reported to DRO. As opposed to Bankruptcy, you can not own more than £20,000 and have a very low so-called disposable income. (less than £50 per month after deducting all necessary home expenses). Your material assets as well as your car must not exceed £ 1,000. You can not include debts such as court fines, alimony or student loan in the solution. DRO is administered by the so-called Official Receiver through the Bankruptcy service. To apply for a DRO, you should contact an authorized adviser, who will check whether a person is eligible for a solution and applies on their behalf. The procedure costs £90 and the fee can be spread over installments. There is also no need to visit the court.

Advantages of DRO

• After 12 months all reported debts will be canceled

• There is no need to visit the court

• It protects against debt collection from creditors

Disadvantages of DRO

• Restrictive requirements regarding earned income, assets and debts that can be included in the DRO (applies only to property owners)

• If your circumstances change, you may still be required to repay your creditors

• Your debt relief order will appear on your credit file for six years. This may affect your ability to get credit in the future

• You can not lead, manage and establish a company without the consent of the court. You also can not be the director of a company without the court’s consent