Sort out debts this Blue Monday to avoid being left out in the cold

Monday 21 January has become known as Blue Monday. It has been saddled with lots of negative connotations, from long, dark, cold days to distant paydays and the festive season a distant memory. However, one of the major contributions to Blue Monday is debt as the Christmas credit card bills start to land on the doormat. But, addressing debt early doesn’t have to be scary – and it can help you avoid a whole host of problems later on.

Firstly, if you are worried about your debts, don’t panic. Plenty of clients end up in my office because they have gone many years without facing up to debts for fear of reputation, or losing assets. A lot of people throw the term “bankruptcy” around, but actually, most of the time, they do not occur and are often a last resort.

There are a number of solutions that may help you. A good first step is a Debt Management Plan (DMP). This is an agreement between you and your creditors to pay your debts via a debt management company. These are popular as they don’t have to go through the courts and they are a good way of spreading the cost of debt into affordable repayments.

If you have a low income, and you owe less than £20,000 you can also apply for a Debt Relief Order (DRO). This will freeze any debt repayments, including any interest, for 12 months. If your financial situation hasn’t improved after that time, your debts could be written off, however, you will have to pay a fee and you will have to appoint an Official Receiver through the Insolvency Service. If your DRO is granted, it will also be published on the Individual Insolvency Register, which is made publically available, and you will remain on there for 15 months.

Finally, for more long-term plans, you could opt for an IVA, or an Individual Voluntary Arrangement. This is a legally binding agreement which can last for 5 or 6 years. It allows multiple debts to be combined into one monthly payment between you and your creditors. IVA are similar to the DMP, however, these are a formal arrangement and you’ll need the help of an Insolvency Practitioner, which you can source from a solicitor. IVAs can also be quite costly, however, if you need more time and you need to consolidate debts, then this might be worth considering.

If you are facing Blue Monday with worrying debts, seek help at your earliest opportunity. Downs Solicitors have assisted a number of insolvency cases, for individuals and businesses. We can also put you in contact with an Insolvency Practitioner, or advise any injustice or wrongdoing associated with debt. Contact us to see how we can help.

Our Team


More Knowledge
Are you locked out of your Child Trust Fund?

If you set up a trust fund for a child who has learning disabilities, you might want to consider how to access those funds when the child reaches 18.

The digital assets that are worth a will

Last year, we wrote a blog about how digital assets are commonly overlooked when writing a will. But, thanks to a recent survey by the Law Society, now might be the best time to give it some thought.

 

Are you a “Silver Splitter”?

Last Monday was National Divorce Day - so called because it is the first Monday “back to normal” after Christmas, the bills start landing on the doormat and frayed couples have spent too long in close proximity. However, as the numbers of separations are largely on the decline, it seems there is a rise in the “silver splitter” - and if you’re one of them, you might find you’re in for a financial windfall.

The Bank of Mum and Dad

It's a good time to sell. Demand for properties amongst buyers is currently exceeding supply meaning properties in the South East are selling quickly and often at, or even above, asking price. The availability of lending to First Time Buyers (FTBs) continues to improve and with lenders offering FTBs incentives such as paying their Stamp Duty Land Tax bill, more young people will be enticed to take their first step onto the property ladder.

Commercial Leases and Break Clauses

In 2014, we reported on the Court of Appeal’s decision in the case of Marks & Spencer PLC v BNP Paribas Securities Trust Company (Jersey) Ltd (BNP Paribas). Following this, Marks & Spencer PLC were allowed by the Supreme Court to appeal the decision of the Court of Appeal to not grant them a refund of the rent they had paid past the break date of the lease.

Minimum Energy Efficiency Standards for Private Rented Property

If you are a Landlord of domestic and/or non-domestic private rented property and the Energy Efficiency Rating of that property (shown on the Energy Performance Certificate (EPC)) is F or G, then this article is relevant to you.

Cobham

15A High Street
Cobham
Surrey
KT11 3DH

T: 01932 589599
F: 01932 505087

DX: 46102 COBHAM

Dorking

156 High Street
Dorking
Surrey
RH4 1BQ

T: 01306 880110
F: 01306 471230

DX: 57300 DORKING

Godalming

The Tanners
75 Meadrow
Godalming
Surrey
GU7 3HS

T: 01483 861848
F: 01483 431965

DX: 58308 GODALMING 1