At CDA we are committed to offering you free debt advice, based on your personal circumstances. We know and understand the causes and effects of debt and we won’t judge you or any decisions you have made.
We are here to help you make the decisions about how to deal with your situation. Everyone’s situation is different.
Our advice is given face to face, rather than over the phone or through the web. Phone and web-based FREE advice is also available – see OTHER SOURCES OF INFORMATION
Please feel free to bring a friend, relative or someone you trust along to your appointments.
What Happens Next?
We need to find out how much you can afford to pay your creditors. This is probably less than they are asking you to pay. We start by finding out how much money you have coming in and how much is needed to pay for your essential bills, things like:
housing costs - rent or mortgage
- gas, electricity & water
- council tax
- TV licence
- travel to work
As part of this process we will also see if there are ways of increasing your income, so
- could you get more or any benefits?
- can you or someone in your family earn more?
- could you rent a room?
- have you had Payment Protection Insurance and can make a claim for mis-selling?
And can you reduce your outgoings, maybe by
- is there a cheaper deal for your phone/broadband/TV?
- is there a cheaper rate for your gas & electricity?
- can you take a packed lunch to work to save money on buying your lunch?
We will then look at how much you owe and who to – some creditors need to be treated as more important than others. We will list all your creditors and put them in order of priority. We’ll help you work out how much you can afford to pay them.
We work with you to ensure that your budget is fair to you and to your creditors – you need money to live on and the creditors need to be sure that the offer you make to them is the best you can afford.
There are a number of ways to manage debt and you may have more than one option. The main ways are:
- Debt Management Plan. This is an informal arrangement with your creditors where they accept a lower payment than you should pay and in most cases the creditors stop charging interest and charges. The creditors need to see evidence that you are paying what you can afford, which is why we look at your income and expenses. You pay the agreed amount to your creditors, which can sometimes be as low as £1 per month. Your situation would be reviewed on a regular basis after that, usually every 6 or 12 months.
- Debt Relief Order (DRO). This is a formal insolvency option. You need to meet certain criteria and it costs £90. After 12 months most debts are written off. The application is done on-line. We have Approved Intermediaries on our team who can process DRO's.
- Individual Voluntary Arrangement (IVA). This is another formal insolvency option. You present a proposal to your creditors to pay what you can afford over 5 years. This is a legally binding agreement. At the end of that time any remaining debt is written off. We would refer you to another agency if you want to explore this option as we are not licensed to process IVA's.
- Bankruptcy. Another formal insolvency option. We can help you with the application forms and the process of becoming bankrupt. It can cost up to £700 to become bankrupt if you are unable to get help with the fees. You may have to pay monthly amounts into the bankruptcy, if you can afford it. Usually after 12 months most debts are written off.
Formal insolvency options can be a good way to solve financial problems and to have a fresh start. They do all have risks and effects that you need to be made aware of before a final decision is made.
Please note that we are NOT Financial Advisors