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Unsecured debt, Can it be written off?

Can your unsecured debt be written off- Please Read and Know about it

Can your unsecured debt be written off

We hear from various friends and adverts suggesting that your unsecured debt can be written off.

It sounds too good to be true and most debt solution companies who offer formal debt solution (Specially IVA).

Debt Solution companies entice people to take out a formal debt plan for their unsecured debt.

It is better to seek debt advice as for most debt solution companies ”debt written off ” means that it is either via IVA or assisted bankruptcy.

There are two formal debt solutions which most debt solution companies promote via adverts.

Let us know about these two debt solutions for unsecured debt in detail.

IVA

This is a formal debt solution which is legally binding and supervised a by a qualified insolvency practitioner. The client’ name will show on bankruptcy register of the insolvency department of UK government. IVA solution can only be dealt for unsecured debts.

( https://www.gov.uk/search-bankruptcy-insolvency-register) .

IVA Solution normally lasts for five years. IVA solution can be extended to a further 12 months if there is no equity to pay for the remaining debt.

At the end of the term of your IVA solution, if there is remaining debt left than that can be written off. IVA Solution could be considered completed with remaining debt be written off.

An IVA solution is not a best or appropriate solution for everyone. IVA must only be considered after seeking appropriate advice from an experienced debt advisor. The only main issue with IVA solution is that you become liable under the legal and binding agreement for your unsecured debt.

For more information about IVA solution, you may visit our website www.acmecredit.co.uk

Assisted Bankruptcy

It is known as a bankruptcy solution or making yourself insolvent.

Assisted bankruptcy is where a debt solution firm charges you a fee to help you fill the official form for your bankruptcy and follow the procedure.

Statute Barred

However, there is a legislation called the Limitation Act which refers to something called statute barred.

This is the only debt law that could see your debt deemed unenforceable, after a period of six years.

Creditors are unable to legally pursue you for most unsecured debts if, after six years;

  • The creditor has not already obtained a County Court judgment (CCJ)
  • You or anyone else owing the money (on a debt in joint names) have not made a payment during the last six years
  • You have not written to the creditor admitting you owe the deb

I am not suggesting you that you should ignore your creditors for six years and not paying them will automatically clear your debt that wouldn?t actually work

As the above explanation suggests, if you start to ignore your creditors they?re likely to get in touch with you rather quickly.

They may even do this through the courts. They may obtain a CCJ or other debt collection procedure available to them i.e. Attachment of earning, charging order.

They can issue bailiff orders or maybe transferring the debt to debt collection companies for professional debt collection method.

?Okay, I?ll move house and not tell them!? some might says, Simply ignoring the debt and your creditor is not recommended as your creditor may impose GAIN entry on your credit report which can impact your credit report severely.

Ultimately your creditor or debt collection company will find out your new address and contact details as they know their work very well.

it?s your responsibility to keep your creditors updated with your current address.

Moving house and not telling your creditors where you?ve gone is seen as debt avoidance.

The Limitations Act

Importantly, the act isn?t there to encourage debt avoidance or non-payment.  Most judges will take a dim view of this tactic.

The limitation act protects people being forced to pay debts that have ?timed out? through no fault of their own.

While the act does apply to most unsecured debts the debt doesn?t disappear.

It?s not ?written off? but with the act, in force, the creditor can no longer enforce the debt through the courts.

Finally, the Limitation Act doesn?t apply to all types of debt.

Some debts such as benefits overpayments and Council Tax don?t need to take court action to enforce debts.

We find our clients are genuine in need to do their best to repay as much as they can afford to their creditors.

Our Company offer correct advice and guide you through the maze of legislation while being impartial and honest at all times.

Sometimes, where a client is on a debt management plan (DMP) with us for their unsecured debt management and out of the blue a creditor they thought they had paid off years ago gets in contact to ask for money.

If this happens to you we can look into the case and give you the best advice for your circumstances.  We can give you all the advice and support you need for statutory debt write off.

Vulnerable Client policy

If we believe that our client is a vulnerable client. There should be adequate proof to confirm this fact.

It can be due to their old age, continuous sickness, long unemployment and other various reasons.

Our team can prepare a detailed case summary and our report will surely help the vulnerable client to write off the entire debt.

For further discussion and to know if your case can be suitable for this solution, please be in touch with us at 0203 318 0990.

Author:
Rajnish Tyagi is an experienced and Cert DR qualified debt advisor at Acme Credit Consultants Ltd. He specialises in offering suitable debt solutions to clients.

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