What Is a Debt Write-Off Calculator?
A debt calculator is a tool you can use to estimate how much debt you could write off with a debt solution such as an IVA. The final amount will depend on your circumstances, including your budget and your debts.
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The Money Savings Advice Debt write-off calculator is an estimate based on the information you have provided. A full debt write-off quote can be provided by one of our hand-picked Debt specialist who will also help with a full affordability assessment.
If your debts are stacking up and you’re looking for help, you could have some of the money you owe written off. Help is available, and our calculator will give you an idea of just how much of your debts could be written off, leaving you a much more manageable amount to save.
It’s worth remembering that this is only an estimate – the amount that can be written off depends on the types of debts you have and your other circumstances. Enter your details now to find out immediately how much of your debts could be written off without help.
Want to know more about getting your debts written off? Here we’ve compiled a short guide on why debts can be written off and what the available options are.
How Does Debt Get Written Off?
Debt is written off when you enter insolvency. This means that you declare you are unable to make the required repayments on the money you owe. Being insolvent will leave a damaging mark on your credit file, meaning it’s hard to take out credit again in future, but it is often the lesser evil compared to wallowing in debts you cannot afford and accrue more and more owed interest.
There are three types of insolvency in the UK. They’re slightly different in Scotland compared with the rest of the UK, but they work in similar ways. Our debt specialists are on hand if you need help with the options wherever in the UK you live.
Bankruptcy is the most severe form of insolvency and is used when you have no realistic chance of paying off your debts in a reasonable about of time. If you’re declared bankrupt, all of your unsecured debts are completely written off, but you could lose your home or car. It also can mean that you have to lose your job, depending on your role within a business – particularly if you work in a legal or finance role or you are a company director.
Your bankruptcy will remain on your credit file for six years, but you’ll have no more demands for repayment from your creditors nor will they even contact you. In Scotland, the equivalent solution is called Sequestration.
Both bankruptcy and Sequestration are very serious, and should only be considered in circumstances where all alternatives – including the following options – have been ruled out.
Individual Voluntary Arrangements
Individual Voluntary Arrangements (IVAs) are much more common than bankruptcies and, for many people, are a great way to write off some of your unmanageable debt. If you are put onto an IVA, you will be asked to make affordable payments to your creditors for a period of 5-6 years, depending on your circumstances. Once the time is up, your remaining debt is written off, and you are debt-free.
The benefits of an IVA over bankruptcy are that you can keep your home, your car and your job, and you’ll only pay what you can realistically afford, based on an affordability assessment you’ll carry out. So, if you’re struggling to make ends meet every month due to the minimum payments expected of you, an IVA can relieve some of that pressure. In Scotland, the equivalent option is a trust deed. These work in much the same way, but the payments are generally only made over four years rather than 5-6.
IVAs are an ideal solution for many people who have large debts and have gradually become unable to meet the minimum payments, or who have suffered a change on their financial circumstances which means contractual repayments are no longer affordable.
It means you’ll still be making some contribution, but after a period of time, your debts are written off, and you can focus on rebuilding your credit score and moving on.
Debt Relief Orders
Debt Relief Orders (DROs) are the perfect solution for someone who has a relatively low level of debt and cannot afford to make any real contribution. They’re designed for people in real hardship who don’t have a lot of money spare, can’t afford to go onto a debt management plan or IVA and who don’t own their own home. With a DRO, your debts are frozen for one year. If, after that year, your situation hasn’t improved then your debts will be written off.
Just as with an IVA or bankruptcy, you’ll have to go onto the Insolvency Register, and you’ll see an impact on your credit file for a number of years, which may cause you problems if you planned to take our more credit. You also can only apply for a DRO if you owe less than £20,000. The Scottish equivalent to a DRO is a Minimal Asset Process (MAP) bankruptcy and again is only for people with no disposable income and few personal assets.
Remember that the calculator gives a guide on how much debt you could write-off, but your chosen solution will have an impact.
Need More Help?
Still, need more help with your debts? That’s where we come in. First, we have a wealth of information on our website all about debt and debt solutions. Whether you’re suffering with priority debts, such as council tax, or you’ve taken out a number of loans, and you need more support in bringing down the monthly repayments, we’ve got tonnes of useful info for you to browse at your own pace. Browse our website to learn more about types of debt and the options available to you in more detail.
How Can Money Savings Advice Help You Reducing Your Debt?
Here at Money Savings Advice, we have partnered with some of the UK’s debt release brokers. They have already helped thousands of people reduce and remove a high percentage of debt, and if you are struggling with debt, they can do the same for you.
Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.
If you would like to speak to one of these brokers, then click on the below and answer the very simple questions.