UPDATE The rules about who can have a Debt Relief Order (DRO) changed in 2021 and more changes are coming in June 2024. From that date you can qualify for a DRO with debts of up to £50,000 and the permitted value of a car you can own is being doubled to £4,000. Thousands of people who are renting will now be eligible to apply for a DRO because of the 2021 and 2024 changes. Many people who … [Read more...]
Should I end my IVA and change to a DRO?
In 2021 the rules about who can have a Debt Relief Order (DRO) were relaxed so a lot more people qualify and in 2024 further changes are being brought in to make it easier to access a DRO. For example, before 2021 the maximum limit of debts in a DRO was £20,000 - from the end of June 2024 that will be £50,000. Will you now qualify for a DRO? If you are in an IVA, you are renting and your IVA … [Read more...]
Amigo – what is happening with “Scheme 2.0”?
In May Amigo's proposed Scheme of Arrangement was rejected by the court. The FCA told the court the Scheme was not fair to customers, a more fair Scheme could be proposed and it didn't think Amigo would go into administration immediately. The judge concluded by saying: The FCA expects the directors to continue to explore and promote a restructuring which fairly allocates the benefits and losses … [Read more...]
Court rejects Amigo Scheme of Arrangement
On 19 May 2021 the Sanction Hearing was held for Amigo's proposed Scheme of Arrangement. On 24 May, judgment was given and the Scheme was rejected. The Amigo Board says : The Board is reviewing all options including an Appeal. A further update will be given in due course. This article looks at the Scheme, the judgment and what may happen next. The proposed Scheme The Scheme was proposed by … [Read more...]
Sunny customers owed refunds paid at 3.21p in the £
On 28 May 2021, the KPMG administrators announced they will be paying 3.21p in the pound to c 40,000 people who submitted a claim for unaffordable loans. All 500,000 customers with mis-sold loans should have had their credit records repaired, see below. 40,000 people is a low number as the administrators calculated that more than half a million were mis-sold loans. Many people may not have … [Read more...]
Money Shop Scheme starts paying out – customers will get 4.31%
I have asked Instant Cash Loans (ICL) what percentage rate will be paid in the ICL Scheme of Arrangement and when customers will be paid. I am told the Scheme will be paying 4.3p in the £ to customers who are due a refund. Some payments are starting this week, they are expected to complete by the end of June 2021. UPDATE - ICL have now officially said it will be 4.31% Which customers … [Read more...]
Good news – higher DRO limits from end June 2021!
UPDATE 2024 In the budget in March 2024, new changes to DRO limits and an abolition of the DRO fee were announced. These increase the total allowable debt in a DRO further to £50,000 and double the increases in the value of a car allowed to £4,000. The full DRO eligibility criteria are set out in What is a DRO UPDATE 10 May 2021 The Insolvency Service has announced the new limits that … [Read more...]
Provident closes its doorstep loan operation after 140 years
On 10 May 2021, Provident Financial Group (PFG) announced that it was closing its home credit operation, also known as doorstep lending. Doorstep lending has been at the heart of Provident's business for most of its 140-year history. Agents would visit customers at home, giving loans and collecting weekly repayments. Now Provident says: In light of the changing industry and regulatory … [Read more...]
The debt “Breathing Space” – could it help you?
The Debt Respite Scheme - better known as "the Breathing Space" - went live in May 2021. A Breathing Space is a 60 day period while you get debt advice and find a suitable debt solution. During this 60 days, you get legal protection from your creditors for most debts and it stops interest and charges being added. Sounds good? For a few people this will be a real help, but often there … [Read more...]
How to choose an IVA firm
Which are the best IVA firms to talk to if you are interested in an Individual Voluntary Arrangement (IVA) and whether it is a good debt solution for you? If you put IVA into Google, how do you decide which of the tempting see how much of your debt you can write off links to click on? Or you could choose the person that cold calls/texts you telling you about a little-known government … [Read more...]
What happens at the end of a DRO?
A Debt Relief Order (DRO) lasts a year. This is sometimes called "the moratorium period". At the end of this year, all the debts that were included in your DRO are wiped out. You aren't contacted at the end of the DRO year There is no "DRO Completion" check made at the end of this year. Not by the Insolvency Service and not by the debt adviser who set up your DRO. You won't be asked to … [Read more...]
Pregnant and can’t afford your IVA?
Abby is pregnant and worried she won't be able to afford the monthly IVA payments: My IVA was set up at the start of 2020. There are four debts in it, totalling £13,000. All the debts date from a previous relationship, my new partner doesn't have a debt problem. My IVA payments are £90 a month. I've managed so far, but I now need to buy things for the baby - cot, buggy etc. We are renting and … [Read more...]
StepChange redundancies & the funding of debt advice
On 22 April 2021, StepChange announced that it was proposing to cut its staff by 10%. It has started the process of consultations about 140-17o redundancies. To many people this will sound bizarre. In October 2020, the Financial Conduct Authority (FCA) found that 20 million people have seen their financial situation worsen because of Covid-19 and 7.7million people saw it worsen a lot. The FCA … [Read more...]
How does a payment arrangement work & is one right for you?
A typical payment arrangement is an agreement to repay a credit card, catalogue or loan in affordable monthly amounts. This is also called an arrangement to pay. You can ask a lender for an arrangement to pay, or a debt collector. The key points are: an arrangement is needed if you can't afford the normal debt repayments; do not offer more than you can afford; ask the lender or … [Read more...]
“Improving my credit score – be added to my partner’s card?”
A reader asked: I have fairly recently got an Aqua card with a limit of £1,900. Credit Karma suggests this is low and a higher limit (with low utilisation) reflects well with lenders. I’ve only just had a credit limit with Aqua so can't get another one soon. But I could be added as a secondary cardholder on my partner’s credit card. This is her idea – she has a limit of almost £10k. She never … [Read more...]
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