Debt Write Off: Everything You Should Know
More than 8.3 million people in the UK are over-indebted. If you’ve found yourself in financial hardship, then know you’re not alone. Staying on top of finances isn’t always as simple as we’d like to think.
There will be times when misfortune finds its way into our lives and times when emergencies arise that call for emptying of your savings account. Landing in debt isn’t uncommon, but it can have a significantly negative effect on the entire family it’s affecting. Thankfully, there are several ways to conduct debt write off.
In the guide below, you’ll find a few different methods to write off debt. Continue reading below to get started down a path to a debt-free life today!
Debt Relief Order
If you have a few assets and a relatively low amount of debt, then you can consider a debt relief order. A debt relief order will freeze your debt repayments for 12 months. Any interest will also be frozen for the 12 months.
This gives you enough time to make changes to your financial situation. Come the end of the 12 months, if you’re still in the same financial situation, then your debt can be written off. A debt relief order is a more cost-effect approach compared to bankruptcy and creditors can’t come after you for your debt during this time.
Do keep in mind, however, that filing for a debt relief order will negatively affect your credit score.
If you can’t afford to start paying off your debt, then filing for bankruptcy might be a good option. Filing for bankruptcy will write off all unsecured debts you’ve accumulated. If you have any assets, such as a car, house, or something else, then do keep in mind that these assets could be used to pay off part of your debt.
Although bankruptcy will clear all of your debt, allowing you to have a fresh start, it does come with serious implications. You only want to file for bankruptcy when absolutely necessary. Always be sure to look into other options before deciding to file for bankruptcy.
After filing, however, all debts will be cleared, and you’ll no longer be contacted by creditors.
Individual Voluntary Agreement
An individual voluntary agreement is an agreement to pay back your loan over the timespan of about 5-6 years with affordable payments. If possible, then you can also consider making a one-off payment during this time to reduce the length of the individual voluntary agreement. You’ll want to get in touch with a debt relief company such as becomedebtfree.co.uk to start the process.
This allows you to pay your debt off with payments you can afford. Once your last payment’s made, your debt is paid and creditors can no longer contact you for payment.
Can Debt Write Off Help You?
Do you believe debt write off can help your current situation? Use the helpful advice listed above to determine which debt management method is the right choice for you.
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