Debt Archives

Getting out of debt

Practical articles about the different debt options, which might work for you and different ways of dealing with creditors

When to send a Prove It letter about a debt

If you get a letter saying you owe money on a debt you don’t recognise, or which you thought you had paid off, you need to challenge the creditor to prove that you do owe the money. Also do this if you find a debt on your credit report yoiu know nothing about. Sometimes debt collectors have simply got the wrong person. This is sometimes called a mis-trace. This is what the Financial … [Read more...]

How to get refunds from catalogues and credit cards

Have you had a credit card, store card or catalogue where your credit limit was too high? So high that the monthly repayments were hard to manage and you got into more debt? For some people the limit was too high at the start. Others were originally given an OK limit, but the lender kept increasing it. or it was OK while the 0% offer lasted, then unmanageable. You may have a good … [Read more...]

How equity release works in an IVA

Are you in the last year of an IVA and have a house with equity? You may have to try to remortgage your house or get a secured loan to pay some of the equity into your IVA. This is called "equity release" This article looks at the questions people have about how equity release works in an IVA. An IVA that starts from July 2025 will probably be under the "2025 Protocol". This says that there … [Read more...]

What happens when you can’t afford IVA payments

If you can't make the payment to your Individual Voluntary Arrangement (IVA) this month, don't panic! There may be options for you to cope and get your IVA back on track. This is very common - five or six years is a long time for everything to go smoothly in your life. You do need to talk to your IVA firm,even if you know the problem is very temporary and you can pay a few weeks late. If … [Read more...]

“Will paying off debt improve my credit rating?”

Will your credit score improve if you can clear some debts? The answer is "Yes sometimes!": it will go up quickly if the main problem with your credit score is credit utilisation (you are using too much of your credit card limit) and you can reduce this signficantly ; it may go up a bit if the debts you will be paying off are defaulted or are in payment arrangements, but probably not a … [Read more...]

Will you get a Bankruptcy Restriction Order (BRO)? Does it matter?

Here are some recent questions from people worried about going bankrupt and possible Bankruptcy Restriction Orders (BROs): I gambled a lot but stopped over a year ago. I want to apply for bankruptcy, but will I get a bankruptcy restrictions order? I have credit card debts which I can't pay as I have had to stop work because of a disability. I went bankrupt in 2008 and had a DRO in 2018. Will I … [Read more...]

DROs – what if my pay increases or I get a lump sum of money?

A Debt Relief Order (DRO) is a simple and cheap alternative to bankruptcy if you are renting and have little money to spare each month to repay debts. A DRO lasts for 12 months and during this time you must inform the Official Receiver (OR): if you receive any money or other assets, or if your income increases. If this happens, the OR may 'revoke' your DRO. That is the legal term … [Read more...]

DRO applications – frequently asked questions

A Debt Relief Order (DRO) is often the best debt solution if you have under £50,000 of debt, you are renting and you have hardly any spare money to repay your debts. You don't have to make any payments in a DRO and, after a year, your debts are wiped out. See What is a DRO? for an overview. This looks at the eligibility criteria and how to apply for a DRO. Here are some common questions … [Read more...]

Paying a defaulted account & your credit score

A reader asked if starting to pay a defaulted account will help his credit rating. Paying defaulted debts may improve your general credit situation, making it easier for you to get a loan, a mortgage or a credit card in future. That credit score number isn't the only thing that matters! But if you have expensive debts that you are still repaying as normal, such as credit cards, it's usually … [Read more...]

How to get a payday loan refund

Have you had problems with payday loans? You can get a refund of the interest you paid on "unaffordable" loans. It’s easy to ask for a payday loan refund using the free template here. This works if your payday loans were repaid or you still owe money. What are “unaffordable” loans? The regulator says: “the borrower should be able to make the required repayments without undue difficulty, … [Read more...]