What are my options if I am in debt in Northern Ireland?

If you are struggling under the weight of mounting debt problems in Northern Ireland, you may be wondering what to do and where to turn. The good news is that no matter how bad you feel your situation is, there is a solution out there to help.

The right debt solution for you will depend on a number of factors including the amount of debt you have, how much you can afford to repay, as well as other things such as your assets and employment status.

In this article we will explore the most common debt options available in Northern Ireland. If you would like to better understand what each debt solution would mean for you or to get an expert recommendation of which option is the most appropriate for your individual circumstances, contact the team at Northern Ireland Debt Solutions where our expert advisers are waiting to help you.

Individual Voluntary Arrangements (IVAs) are the most common debt relief option for individuals in Northern Ireland dealing with debt they can no longer afford to repay. IVAs function as a formal repayment plan which is entered into by an individual and their creditors.

An IVA typically lasts for five years, during which time the individual will make one set monthly repayment towards all the debts included in the IVA which will then be split proportionally amongst all creditors. At the end of the five years, so long as all payments have been made as agreed, the remaining debt will be written off.

IVAs give an individual the opportunity to repay what they can afford towards their debts, without any creditor pressure, contact, or added interest.

In order to enter into an IVA, individuals must have enough disposable income to make a monthly contribution towards their debts, and this proposed amount must be agreed to by their creditors.

A Debt Management Plan – or DMP – acts as an informal repayment plan and is similar in some ways to an IVA, however, there are some crucial differences you should be aware of.

You will liaise with your creditors and agree to make reduced payments towards your debts. This will make it easier for you to make the required repayments on a monthly basis, however, none of your debt will be written off with a DMP so you must be prepared to pay back every penny you owe over this time.

On the plus side, all interest and charges are typically frozen as part of the DMP arrangement which means all the money you repay as part of the DMP will come straight off the total amount you owe rather than just servicing the interest. This makes it much easier and quicker to clear your balance.

An important part to note is that a DMP is not legally binding and either party (you or your creditors) can cancel the arrangement at any time. This means that if your creditors get impatient and decide they want their money back sooner, they can cancel the DMP and ask you to pay more towards your outstanding balance.

Bankruptcy is the most serious personal insolvency solution in Northern Ireland, however, for those with insurmountable debt problems, it can be the only realistic option.

Bankruptcy will have a hugely detrimental impact on your credit rating which will remain the case for a number of years. This will severely limit your ability to access credit in the future and may even affect your employment depending on what you do for work.

If your financial situation is extremely problematic, and you simply do not have the funds available to make a meaningful contribution towards your debts, bankruptcy may be the best option available.

It goes without saying that you should not enter into bankruptcy without first seeking the services of a debt expert who can help assess your options and check your suitability for alternative debt relief solutions.

We speak to individuals across Northern Ireland every single day who are dealing with debt they simply cannot afford to repay. Our team of personal insolvency and debt specialists can talk you through your options and advise which one is most appropriate for you and your situation. Contact our team today and take the first step towards a debt-free future.