DMPs are most generally designed for those who have lower amounts of debt e.g. £7,500 and are in a situation where their finances might improve within a foreseeable period. The problem with these plans is that the monthly payments are usually so low that they never repay the capital and drag on for years at a time. The positive points are that creditors are kept at arms length and often interest is frozen for a period of time, though not permanently.
If your debts are below £15,000 and you meet the criteria, you might want to consider a Debt Relief Order, which is a type of ‘mini bankruptcy’. If you go on the internet and find that you fit the criteria, then this is definitely the better option as your debt is wiped once and for all – your local CAB will arrange the DRO paperwork for you. If your debts are above £15,000 it is unlikely you will ever repay the capital and you might want to call us.
Bankruptcy Trustee-When you enter into bankruptcy your application goes from the court where a copy is kept and a copy is forwarded to the Official Receiver who will be responsible to establish whether or not a Bankruptcy Trustee should administer the bankruptcy. This appointment provides the role is to liquidate any assets and distribute the proceeds to your creditors. This is only if you have assets such as a house or property with equity in. If you have nothing and live in rented accommodation and are simply entering bankruptcy to rid yourself of un manageable debt then a bankruptcy trustee will not be appointed.
A trustee is usually only appointed if there are assets to protect for and on behalf of creditors. so if you are a home owner, or you run your own business then it is likely a trustee will be appointed. It is at this point if you haven’t already will really need to think about what you are going to do. What and who is going to be affected by what is happening. It is likely that if you have a partner and children or family that is going to be affected by the procedure of the Trustee claiming assets on behalf of creditors.
With emotions sometimes running high and the fear of loss that you will all experience it is crucial that you remain focussed and find ways of either managing the situation or adjusting to what is happening and formulating a plan for the immediate future.
Do not bury your head in the sand and think everything will be OK. There are times in life you have to take decisive action. This is one of those times.