Dealing with debt is difficult, thankfully the government has made it easy for the public by providing different alternatives to cope up with their debts.

I compiled this guide on how different solutions like consolidation loans and IVAs can help you.

Let’s get right to it.

Coping With Debt

There are a number of debt solutions for people living in the UK. 

This is why it is so important to get debt advice so that you choose the right option for yourself. A normal person cannot be expected to know every debt solution out there which is why it is necessary to get debt advice.

Not only this, professional debt advice can also help you get better interest rates on your loans. After getting formal debt advice, people are better prepared for any debt related problem that comes their way. 

You also need to consider the fact that everyone is in a different financial situation. This means that no single solution can work for everyone. There is no point in comparing your situation to another debtor’s or opting for a solution solely because it worked for someone else.

If you act on your own, you might be actually choosing a debt solution that is bad for you. There might be other alternatives which could help you become debt-free much more easily.

This is why debt advice is so important because it is given exactly according to your financial situation at a time.

You can get the help of a money advice service as well. They have professional insolvency practitioners and debt officers on board who know all about the existing debt solutions.  

A money advice service can also help people in negotiation with their creditors. This means that you could reduce your monthly payments and thus avoid creditors calling you for missed payments. 

There are a lot of debt solutions available for different debt problems. Since loans are very common in the country, the government has taken action and made a lot of laws regarding debt. 

financial conduct authority assets

Options For You To Consider

To cater to the debt problems of the public, the government has started different programs so that debt solutions are provided to everyone, no matter their circumstances.

Without further ado, let’s discuss some of the best solutions among these:

Individual Voluntary Agreement

An individual Voluntary Agreement (IVA) is an agreement where a qualified individual called an insolvency practitioner deals with your creditors. You usually work out a repayment plan for your IVA and you focus on sticking to that plan. 

Your insolvency practitioner will also give you formal debt advice. This will help people in ensign their debts early. 

In Individual Voluntary Arrangements, you and your insolvency practitioner work out monthly payments that you can easily afford. You then give the money to your practitioner who keeps distributing it to your creditors on a monthly basis. 

Also, Individual Voluntary Arrangements are approved by a court so your creditors have to agree to go with it.

Keep in mind, 

An insolvency practitioner charges high fees to deal with your creditors. And if you decide to go to a company to get an insolvency practitioner, they will charge more on top of the fees of the practitioner. 

You can find your own practitioner on gov.uk and do not need to go to a company.

Debt Relief Orders

A debt relief order is a way for you to write off your debts if you have a low amount of debt and have very few assets too. You can contact different services to help you apply with insolvency services and get debt relief orders.

Debt Management Plan

A debt management plan is a way for you to pay back your debts at a rate you can afford. Debt management plans work best for unsecured debts and non-priority debts. 

If you have a number of unpaid unsecured debts, getting a debt management plan is the way to go.


Debt management plans also come with debt advice. Your debt management plan provider will help you talk to your creditors as well to lower the money going into your monthly repayments.

Debt management plans cannot be used to pay priority debts like council tax and child support etc.

Debt Consolidation Government Programs

A consolidation loan is one in which you take one loan to pay off all the other loans. This way you only have one loan to worry about rather than several.

An option that you can try is the Post Office Personal Loan, which is provided by the Bank of Ireland. You can actually get lower interest rates for your consolidation loan here as compared to other companies offering similar services.

Make sure to visit their website before you make a decision. Believe it or not, simply visiting an organization’s website can help people in knowing everything they want to know. This eliminated the need to get paid help on your loans.

Frequently Asked Questions (FAQs)

Is There A Government Program For Debt Reliefs?

There are no government debt reliefs provided to the public. However, there are multiple solutions given to deal with problems related to debt. Some of these solutions are given in this article as well.

What Is The Quickest Way To Get Out Of Debt?

The quickest way to get out of debt is to pay more than the minimum monthly repayments. You need to put in every penny you have that you don’t need into the repayment of your debts. 

Does A Consolidation Loan Appear On Your Credit File?

Yes, it does. It stays on your credit file for seven years from the time the consolidation loan was approved. People with a bad credit history are usually not given consolidation loans.

What Is A Good Interest Rate For A Consolidation Loan? 

A good interest rate is anything that you can afford to pay. The average interest rate is around 18% for a debt consolidation loan.

Wrapping It Up

Getting a consolidation loan can be good for you but it really depends on your individual circumstances.

If you need someone to guide you through your debt related problems, do reach out to us. I would be happy to help.

Good luck!

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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