STRATEGIES FOR DEALING WITH DEBT.
This flow chart illustrates options for dealing with debts based on different client circumstances.
It is intended as a basic guide and more detailed references should always be checked and consequences
considered.
DMP through free provider if owe more than
£5,000
Bankruptcy with Income Payments Order
IVA but debts may need to be over £15,000
Available
income
Options
Pro rata offers to creditors
Administration Order. Must owe under £5,000 and
have a CCJ
Debt Relief Order if debts under £15,000 and assets
£300 and available income less than £50pcm
No assets
Bankruptcy if debt over £15,000
No
available
income
Moratorium or token offers of payment to creditors
Options
Debt Relief Order if debts under £15,000 and
assets £300 and available income less than £50pcm
Write offs
Tenant or
boarder
Pro rata offers to creditors
IVA but debts may need to be over £15,000.
Beware how assets will be treated
Available
income
Options
DMP through free provider if owe more than
£5,000
Full and final settlement using assets
Administration Order if owe under £5,000 & CCJ
Assets
No
available
income
Administration Order if owe under £5,000 & CCJ
based on small monthly payment with Composition
Order
Options
Moratorium or token offers of payment to creditors
Full and final settlement using assets
No
available
income
Moratorium or token offers of payment to creditors
Options
IVA but debts may need to be over £15,000.
Beware equity clause
Equity
Available
income
Options
Administration Order. Must owe under £5,000 &
CCJ
DMP through free provider if owe more than
£5,000
Pro rata offers to creditors
Home
owner
Bankruptcy
No
available
income
KEY TO FLOW CHART
Administration Order if owe under £5,000 & CCJ
based on small monthly payment with Composition
Order
Options
Administration Order if owe under £5,000 & CCJ
based on small monthly Composition Order
No equity
(See the ‘repaying what you have
borrowed’ section for explanations)
DMP = DEBT MANAGEMENT PLAN
IVA = INDIVIDUAL VOLUNTARY ARRANGEMENT
CCJ = COUNTY COURT JUDGEMENT
Moratorium or token offers of payment to creditors
DMP through free provider if owe more than
£5,000
IVA but debts may need to be over £15,000
Available
income
Options
Administration Order. Must owe under £5,000 &
CCJ
Pro rata offers to creditors
Bankruptcy with Income Payments Order