We have compiled the most important, in depth information on Critchleys. Learn about their services, customer reviews and the company details.

Who are Critchleys?

Critchleys is seen as a leading independent advisory firm in Oxfordshire. The company provides various advisory services, including personal financial planning as well as corporate finance and business recovery.

Why are IVAs useful?

An Individual Voluntary Arrangement is a useful debt solution to people who are in serious debt problems whereby they cannot afford to pay the debt back no matter how hard they try. This puts an extreme amount of pressure on an individual or family. With an IVA set up with your creditors, they can no longer constantly get in touch about your debt repayments except for when you start missing IVA payments.

Managing your debt repayments can be stressful enough but receiving calls every day about a debt you genuinely cannot pay can be awful to deal with. An IVA can end this nightmare, by forming an agreement between your creditors and yourself about the amount you are able to pay and how the time scale it will take you to pay it.

How long does an IVA last?

The normal length of an IVA agreement with Critchley’s will be around 5 years but it is often the case that creditors will want to arrange it for 6 years depending on circumstance. With that in mind, you may fear that you will never be able to pay back the entire sum of your debt in that short period. However, in the case of an IVA, an important cause states that once the agreed upon time period has expired, all remaining debt that you are yet to pay will be cleared from your account. .

In order for the IVA to go ahead, the terms and conditions of the solution state that the creditors holding at least three quarters of your debt must agree to the IVA. This means that no matter how many creditors your debt is spread across, if you owe £20,000 then the creditors holding at least £15,000 must agree to the IVA.

Once that occurs, you will become eligible for an IVA according to it’s terms and you will be subject to the conditions that your creditors and Critchley’s agree to.

How do I set up an IVA with Critchleys?

According to FCA regulations, the solution of an IVA can only be created and managed by an insolvency practitioner qualified specifically in the activity of IVAs. Critchleys is a firm eligible to carry out this activity but unlike a debt management plan, an IVA cannot simply and informally be agreed between an individual and a creditor. To organise an IVA, you need to get in touch with a company like Critchleys who will draft up the IVA contract and check your eligibility.

Critchleys are qualified professionals by the FCA in the activity for providing financial advice for individual finances whether that be IVA’s or bankruptcy. They will therefore be completely able to aid you in the set up and management of an IVA with your creditors.

As the decision to take use the insolvency solution of an IVA is quite an intensive one, it is always recommended to do your research, talk to friends and family and seek free advice from professional charities such as step-change or Citizens advice before finalising your decision.

What is the criteria for an IVA with Critchleys?

To begin with, although a primary eligibility factor for an IVA is having a large sum of debt to multiple creditors, you will also need to have around £100 spare per month to pay towards your IVA debt repayment.

Although it is isn’t always the case, it would be rare for a creditor to enter in an IVA agreement with you if you offer much lower than £100 a month. The idea is that although you will be paying much less than the amount you owe, your creditors will still be wanting to receive a substantial amount in repayments. The sum of £100 a month illustrates your willingness to start paying back your debt whilst being able to afford to survive without it.

However, IVAs are sometimes flexible. Critchleys will take on the job of looking through your finances to effectively assess how much you are actually able to afford each month whilst being able to pay for living essentials. It is likely that they will also help you stretch your budget further to free up more spare income each month.

One further key factor in order for an IVA to be approved is for your income to be regular and to be predicted easily. Those who have an inconsistent or fluctuating income may be denied the chance to enter into an IVA just as those without a job at all will be.

Paying your way to an IVA

IVAs take the assets a person owns but also their pension (if over 55) into account. Homeowners should be aware that most IVAs require that a professional is hired to valuate your property during the final year of the agreement. Re-mortgaging may be required as part of the IVA but this depends on individual circumstance.

This type of debt solution does need to be paid for by the debtor in order for it to be set up as it involves lawyers and accountants. A Critchleys IVA can vary in price from £2000 to £5000 depending on particular situations. It should be stated that an IVA is a debt solution used as a last resort to illustrate to creditors the difficulty of your situation but it does come at a cost to the debtor.

The type of payment method varies between different insolvency practitioners as some will ask for payment up front whilst other will include the cost in your monthly repayments.

This is because as IVA doesn’t really mean you pay creditors directly but instead you pay int the IVA each month which is then divided between the creditors. Therefore, Critchley’s (or any other IVA provider) can withdraw their fees from that amount. It could almost be described as Critchley’s becoming another creditor you owe money to.

It is an important practice to ask for prices or quotes from Insolvency Practitioners before you make any lasting decisions as some are more expensive than others and some will be more suited to your needs. Find the best arrangements and lowest fees for you and try to take part in an initial meeting with each one so that they can gain an understanding of your situation before they work with you.

Does an IVA with Critchleys mean bankruptcy?

No. An IVA is a totally separate and unique debt solution to bankruptcy. Although both solutions are forms of insolvency, bankruptcy requires all of you assets to be sold to pay off the outstanding debt and an IVA doesn’t.

An individual can either apply for bankruptcy if they are in a large amount of debt or they could be forced into bankruptcy by a creditor if a substantial amount of money is owed to them. To do this, the creditor would apply for you to be declared bankrupt, rather than you applying to be considered as such.

You should only apply for an IVA if you have a debt with a sum total of £15,000 or more whereas you could consider bankruptcy from as little as £750 owed. An IVA is likely to last for 6 years and it will remain on your credit file for an additional year after whereas Bankruptcy lasts for only a year but will remain noted on your credit history file for six more years.

An is almost always the preferred solution if you can qualify. An IVA allows you to pay back an agreed amount every month and it allows you to keep your assets and your property. Bankruptcy is harsher as it requires that all possible, non-essential assets (within reason) are sold to pay off the debt that you owe.

At the end of an IVA, you are most likely to have not managed to pay the entire sum but if you have kept up with your payments, the remaining total of your debt is cleared. Bankruptcy and IVAs are both solutions to extreme financial difficulty where you owe creditors a large or substantial quantity of money, but an IVA is preferable because it’s much more manageable.

Your responsibilities

With regard to your Individual Voluntary Arrangement, your main responsibility is to keep up with your repayments. If you cannot manage to stay on top of your repayments, then your Insolvency Practitioner is completely within their rights to cancel your IVA.

Once your IVA starts, it’s listed in an online database that is accessed by agencies that need to check your credit rating and history. An IVA does have an affect on your credit rating for up to a year after you clear your debt, which can make it more difficult for you to open new financial accounts or take out financial products. However, there are so many benefits to taking out an IVA as a solution to your debt.

The benefits

A Critchleys IVA can help you manage and settle a debt that is just too large and accumulating interest too quickly for you to ever pay back. It will put a stop to harassment or annoying contact with your creditors, while ensuring that your debt is cleared or wiped after the set 5 or 6 year period – you just have to ensure that you keep up with your payments.

As an IVA is set up through an Insolvency Practitioner like Critchleys, you will not need to contact or pay your creditors yourself. Critchleys will set up the IVA for you to pay in to, and they can also contact your creditors on your behalf.

Once your IVA is in place, none of your creditors can take any legal action against you. They cannot take you to court, and they cannot apply to make you bankrupt. Any and all interest or additional charges are also stopped. You only pay back what you can afford to, and you only pay back what you want.

If nothing else, an Individual Voluntary Arrangement will enable you to redesign how you save and manage your finances. The first step is usually looking at your budget, checking your incoming finance and your outgoings, and figuring out exactly what you can afford to repay to each of your creditors. With the help of a great Insolvency Practitioner, any struggling individual or family can get back on track with ease.

Consider debt consolidation

Debt consolidation is one of four main ways people manage their personal debt:

  • A Debt Management Plan (DMP): You work with a registered DMP provider such as Critchleys to organise an agreement to pay off your debts in instalments, usually over 5 years.
  • An Individual Voluntary Arrangement (IVA): As discussed, this is set up by an insolvency practitioner like Critchleys and managed totally by them.
  • Bankruptcy: This is a final-resort choice where you cannot afford to pay off your debts because you do not have the income, assets or ability to make payments by yourself.
  • Debt Consolidation: A way to take out one single loan to pay off all your debts before then making one monthly payments with lower interest.

What is debt consolidation?

Debt Consolidation is an effective way to improve your financial management and reduce the overall amount you need to pay.

The method of debt consolidation allows you to move all your debt into once account at often a lower interest rate. This makes managing your monthly payments a lot easier as you no longer have to keep track of multiple payments across multiple dates but instead you have a single payment to make once a month.

How Does Debt Consolidation Work?

Debt Consolidation works by an individual taking out a new line of credit either in the form of a personal loan or balance transfer card. The total amount of this credit needs to cover the total balance of all your outstanding debts. After using this new loan to clear your multiple debts you will be left with a single monthly payment.

This prevents people from forgetting and missing payments by having a convenient and organised single payment but it also may allow you to pay less through taking out a loan at a lower interest rate.

Overall, your personal finances will become easier to manage, you may reduce your overall payment amount through lower interest rates and you will be on your way to overcoming your debts.

Is it a good idea to consolidate my debt?

When you hold any debt obligations in your name it isn’t ideal. Therefore it may not seem intuitive to take out further lines of credit. However, consolidating your debt could prevent your debts from getting worse and lower the overall amount you have to pay back in the long-run.

Will debt consolidation affect my credit score?

A debt consolidation loan can have both a negative impact on your credit score in the short-term but a positive impact in the long-term.

This is because when your first apply for a debt consolidation loan you may be subject to a hard search on your credit report which will lower your credit score originally but once you are accepted and you start making consistent payments towards the loan your credit score will start to rise.

This may seem strange for some, but getting into debt is actually the best way to build credit as regular payments illustrates to creditors your ability to pay them back. A debt consolidation loan is a great way to achieve this as your not increasing your total debt but you are simply making it easier to manage.

What type of debt can I consolidate?

Common types of debt that people choose to consolidate include:

  • Personal loans
  • Credit cards
  • Catalogue balances
  • Car loans
  • Tax bills
  • Store cards
  • Utility debts

Work out how much debt you carry

Before you can get a clear picture of how much money you can save by consolidating your debt, you need to know exactly how much debt you have.

Don’t leave anything out here or you may end up paying more money to clear your consolidation loan plus any small debts you don’t consider as important.

Be careful when you look at taking out a debt consolidation loan. Knowing how much debt you want to consolidate and the amount you need to borrow to cover your debts is essential so you can choose the right type of debt consolidation loan.

When will the consolidation loan be paid off?

An vital aspect of taking on a consolidation loan is understanding the exact amount of time it will take for you to pay off the debt.

Your re-payment plan will continue to have an impact on your monthly budget just as before. Contrarily, if you have a plan in mind for a large change like buying a new home or moving house in the near future, you should understand how paying your consolidation loan off will affect your plans.

You could pay off your debt consilidation loan faster by applying for a higher repayment rate which although will cost you more each month it will allow you to make your move.

You could also choose a repayment plan that will take longer to pay off but it will allow you to save more each month which you could then put towards a deposit for you new home.

Assessing the amount you can affordably pay each month will also affects the terms and interest rates of the debt consolidation loan.

What is the difference between debt-consolidation and a DMP?

Taking out a debt-consolidation loan can be the better choice for you if you know that you can comfortably afford your debts.

A debt management plan (DMP) with Critchleys is more suited to people that have run into financial trouble and are struggling under the weight of their debts.

A DMP is a good solution to help manage your debts and pay back what you can afford. A DMP usually lasts for five years, but can be extended under certain circumstances.

The major downside of choosing a DMP is when you are a homeowner with equity built up in your house. You will need to release that equity in the last year of a DMP to pay towards your debts.

This can mean re-mortgaging your home or taking out a personal loan to cover your equity payment.  This can work out more expensive in the long run due to the negative effect a DMP will have on your credit score.

When faced with a choice between debt-consolidation, DMP and bankruptcy, the safest route to follow if you have a steady income and can afford a reasonable level of repayment would be the debt-consolidation route.

The advantages of a debt consolidation loan over a DMP with Critchleys

Using a debt-consolidation loan should mean that you will have a total sum of money great enough to pay off all your other outstanding debts to your multiple creditors.

Another benefit of a debt consolidation loan is that in most scenarios, your new debt consolidation loan will have a lower interest than your other debts so you will save on interest.

The rates of interest on a consolidation loan are usually lower than an average credit card, so you can pay off your credit card balance and still be able to use your card sensibly to build your credit score back up.

Taking out a debt-consolidation loan to clear your debts and paying it back regularly and on time will help to raise your credit level over time.

The disadvantages to consider

If you already have a poor credit score, you may only be able to get a loan with an unfavourably high-interest rate. If this is the case you will need to work out if it would be cheaper, in the long run, to keep on paying your existing creditors rather than take on the loan.

Should you have a negative credit score you may not even be able to qualify for a consolidation loan.

You need to be sure that you can comfortably pay off your consolidation loan in full. Should you fail to make your payments on time or you will struggle to meet them, you will incur late payment fees that will add to your debt and make it more expensive.

What do I need to qualify for a consolidation loan?

There will be certain requirements that you need to meet to be able to qualify for a consolidation loan.

These requirements will vary from lender to lender, but the most important requirement will be proof from you that you are financially stable enough to be able to manage your loan repayments.

Lenders will want to see your proof of income to be sure that you are in a stable job with a steady and reliable income.

They will also want to make sure that your income is high enough for you to be able to afford to meet your monthly payments as well as your other financial commitments such as your rent or mortgage and household bills.

Your lender will need to check your credit history before they decide to offer you a loan. They will use your credit score to work out your loan interest rate, so the better credit score you have the lower your loan interest rates should be.

What about using a balance transfer card?

If you are only carrying credit card debt rather than multiple debts from different lenders, then you could look at using a balance transfer card to move your debt from your more expensive credit cards to a cheaper one.

In most cases, you can use a balance transfer card to take advantage of an introductory 0% interest rate for a certain period of time.

If you can clear your credit card debt within the 0% period of time, then you could save yourself a lot of money not having to pay any interest on your debt.

Are there any catches?

What you need to be aware of is that most balance transfer cards will charge a transfer fee. This is usually between 3 and 5 per cent of the debt being transferred.

You will need to work out how much you will be spending on the transfer fee to make sure the deal is worth it.

You need to be confident that you can pay off your balance before the 0% promotional period expires. Otherwise, you may find yourself paying higher interest charges on your new card than you were on your old card(s).

Conclusion

If you are in a position where your outstanding debts are quite low and you have a good credit score, taking out a consolidation loan could help you to reduce your debt and make it easier for you to pay back what you owe.

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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