Personal Debt

It can be extremely overwhelming when your personal debts start getting out of control. Each month you may dread how you’re going to honour upcoming repayments and still make ends meet. Maybe you simply can’t afford to repay them, or you may even be putting yourself into further debt in order to repay your existing loans, this is a downward spiral and we can help you get out of this situation.

We are helping people nationwide arrange affordable repayment solutions that leave you with money to live off after paying your creditors. Please see more information about our services below

Umbrella provide Individual Voluntary Arrangements (IVA) for individuals struggling with debt. An IVA can help you take control of your money and move on with your life.

Q. Will my IVA be approved?
A. To be accepted, an IVA has to be agreed by more than 75% of creditors (by value) taking into account only those creditors who have decided to vote.

Umbrella follow the IVA Protocol, meaning that there is a high likelihood that your proposal will be accepted. With Umbrella’s experience, we will be able to advise you whether creditors are likely to accept your IVA after a FREE consultation over the phone. If we don’t think an IVA is right for you then we will help you secure alternative help.

Q. What are your fees?
A. IVAs can only be prepared by Licensed Insolvency Practitioner’s and subject to the agreement of all parties, Umbrella will deduct their professional fees from the payments that are made to your creditors.

IVA fees are made up of two charges. The nominee’s fee covers all work incurred by the Insolvency Practioner preparing the IVA proposal and negotiating with your creditors on your behalf. This is usually the sum equivalent of five monthly payments. Subject to a minimum charge of £1,000.

The second charge is the supervisor’s fee, which includes time spent on the ongoing management of an IVA and distributing the funds to creditors. It is calculated at 15 per cent of payments after the nominee’s fee have been paid. All charges are disclosed to you before the IVA begins and your creditors must approve those fees.

See A Creditors Guide to Insolvency Practitioners Fees in Respect of IVAs

Q. Will an IVA have an effect on my credit rating?
A. An IVA will effect your credit rating for 6 years after approval. One of the requirements of an IVA is that you do not apply for new credit during the contract term.

Q. What happens if my circumstances change once my IVA has been approved?
A. If your circumstances change then payments may increase or decrease depending on how affordable they are. If you get an unexpected cash windfall of over £500 then this must be paid into the IVA for the benefit of your creditors.

Q. Are all my debts included?
A. An IVA covers unsecured debts like personal loans, credit cards and overdrafts. Many debts cannot be included under an IVA. These ‘priority debts’ include fines, student loans and child maintenance payments. Other debts that can’t be included are payments on your mortgage, secured loans and secured car finance. These debts still need to be repaid but they will be taken into account when judging the affordability of your IVA payments.

Q. Can an IVA help me avoid bankruptcy?
A. IVAs can help you avoid bankruptcy if you keep to the agreed terms. Failing to meet the terms can lead to bankruptcy proceedings being started against you.

Q. Will anyone be able to find out I have an IVA?
A. An IVA is recorded in a public register but there is no requirement to publish it in your local newspaper, unlike with bankruptcy.

Q. What happens at the end of my IVA?
A. If you comply with all of the IVA terms, Umbrella will issue a final report and a certificate of completion. The certificate can be sent to credit reference agencies who will then be able able to update their records accordingly.

Q. Where can I find out more about dealing with my creditors?
A. You can find out more about dealing with your creditors in a guide produced by the Insolvency Service: https://www.detini.gov.uk/sites/default/files/publications/deti/In-debt-….
You can also find alternative free debt advice organisations as recommended by the www.moneyadviceservice.org.uk.
For more information on what an IVA is see: https://www.moneyadviceservice.org.uk/en/articles/what-is-an-individual-…also R3, the insolvency trade body, have produced a publication “Is an IVA Right for me”

If you think an IVA could help you please call Umbrella for a no-obligation review on 0800 611 8888 or email us at help@umbrella.uk

Your options

Break free from the debt cycle with an Individual Voluntary Arrangement (IVA) from Umbrella.

An IVA helps individuals take back control and move on with their lives. Umbrella will be with you every step of the way offering guidance and uncritical advice to make the process as hassle-free as possible.

An Umbrella IVA can help you:

  • Reduce stress by preventing creditors from legally contacting you.
  • Understand different debt solutions available to you.
  • One affordable monthly payment with any unpaid debt written off.
  • Take control of your money again.
  • Make sure you have enough to pay bills not included in the IVA, like mortgage, rent and council tax.

With Umbrella you will get your own personal debt adviser to make sure you are fully supported through every stage of the process.

Individual Voluntary Arrangement (IVA)

An IVA is a legal agreement between you and your unsecured creditors. The agreement requires you to make monthly payments over a set period of time (usually 60 months). At the end of this period any unpaid debt will be written off.

If the Umbrella believe that an IVA is not the best solution for your situation then we will explain why and ensure that you receive the best possible advice as to the other options available to you.

Only pay what you can afford with any unpaid debt written off.

Benefits of an IVA

  • An IVA is automatically binding on all creditors if more than 75 per cent (by value), of those creditors who decide to vote, agree to your IVA proposal.
  • You only make one affordable monthly payment. This covers all of your unsecured debts that are included within your IVA.
  • An IVA can help you avoid bankruptcy.
  • Once agreed, interest and charges are frozen for all unsecured creditors. So your debts won’t keep piling up.
  • Creditors and collection agencies will be blocked from contacting you and causing unnecessary harassment.
  • Once the IVA term is over, any unpaid debt will be written off and you will be debt free. IVAs usually expire after 60 months (the term may be extended slightly if you have equity in your home and are unable to obtain a secured loan/remortgage).
  • At the end of an IVA your income will be yours again. Your credit rating will also start improving.
  • If you are in a sensitive profession then you are less likely to lose your job.
  • If you are a homeowner, you will be able to keep your home.
  • Take the stress away from dealing with creditors. Don’t be afraid of answering the phone or opening the door.

You may be eligible for an IVA if:

  • You can’t afford your debts.
  • The combined total of all your unsecured debts is more than £4,000 (unsecured debts include personal loans, store cards, credit cards, pay-day loans, bank overdrafts, catalogue debts and personal guarantees).
  • You have three or more debts owed to at least two creditors.
  • You have regular income and can afford to pay at least £70 per month to service your debts.
  • You rent a home, are a homeowner or lodge with family.

Servicing existing debt by taking on new lines of credit isn’t a long term solution to managing your debts.

With some credit cards, if you are making the minimum payment to your provider then it could take more than 25 years to pay off your debt.

Get in touch today for a free IVA consultation with one of our experts. Call: 0800 611 8888, email help@umbrella.uk or request a call back.

Download PDF of The Insolvency Service ‘In Debt Dealing with your creditors’

Download PDF of the Association of Business Recovery Professionals ‘Is a voluntary Arrangement right for me?’

Download PDF of Voluntary Arrangements – A Creditor’s Guide to Insolvency Practitioners Fees.

If an IVA is not appropriate we will ensure that you receive the best possible advice as to the other options available to you. We refer you to StepChange, a registered debt charity and not for profit organisation, who can advise you about the possible alternatives to an IVA. Visit www.stepchange.org or call free on 0800 138 1111

Alternative debt solutions are available. It’s important that you find one that matches your personal circumstances. At Umbrella, we aim to provide you with the best quality information and advice to allow you to make informed decisions about your debt future.

Debt Solution Alternatives

Bankruptcy is a form of insolvency and is normally only suitable for those people who can’t pay their debts back within a reasonable time period.

Declaring yourself bankrupt can be damaging in lots of ways, but for people with severe debt problems it can be the only viable solution. You are usually released from debts after 12 months.

Bankruptcy should only really be considered as a last resort. You will lose control of assets and bankruptcy can adversely effect certain professions.

Unlike an IVA, a Debt Management Plan is an informal arrangement with your creditors to reduce payments to an affordable level. Interest and charges may be stopped or reduced as a goodwill gesture only, and in all cases the plan will continue until all your debts have been repaid in full. Furthermore your assets may be at risk of creditor enforced action.

Debt management companies offer debt management plans for a monthly fee, but you can secure a free Debt Management Plan through debt charities such as StepChange.

A Debt Relief Order is a simpler and quicker alternative to bankruptcy, lasting for 12 months.

It is suitable for those people who owe less than £20,000, have few or no assets (less than £1000 and not a home owner) and have disposable income of less than £50 per month.

When the 12 month period ends all of your debts are written off.

A debt consolidation loan or remortgage can help you pay off a number of existing debts, consolidating them into one affordable loan with one repayment. You can reduce the amount of interest you pay, but if your credit rating is already bad then you may find it hard to secure a competitive loan.

The Money Advice Service (MAS) is a government institution providing free, impartial money advice. See www.moneyadviceservice.org.uk or call them free on 0300 500 5000

StepChange is a registered charity that can help you escape debt. Visit www.stepchange.org or call free on 0800 138 1111.

Call us free today 0800 611 8888