Have you been struggling to pay off your loans recently? Are you worried about the legal consequences you might have to face if you consistently remain unable to pay off your debts?
You can avail of some legal options to stay afloat and avoid prosecution, and they involve something called the insolvency register. Keep reading if you want to get free and valuable debt advice.
What is the Individual Insolvency Register?
In England and Wales, it is a record of insolvent people who have opted to use an insolvency solution to help pay off their debts and avoid legal consequences.
You are considered insolvent when your financial state does not allow you to pay off your debts back on time. For individuals, this may mean their income isn’t enough to allow them to pay their creditors, or their accumulated loans cannot be paid off with the assets they own.
As for the specifics, it is a public record that shows your name, date of birth, address, details on your Insolvency Practitioner, the ending date of your solution, and other details based on what your financial situation is.
Why is my Name on the Register?
To put it simply, your name is on the register because you’re insolvent, and you’ve opted for an insolvency solution.
When you’re struggling to pay off your debts to the point where the total value of what you owe exceeds the value of the assets you own, you are considered insolvent.
This isn’t necessarily something to be too worried about, though. The State needs to keep a record of all the insolvent people with accurate details and profiling so they can avoid cases of mistaken identity.
All in all, your name is on the register of insolvencies because you can’t afford to pay your debts with what you own, and you’re being given the option to choose an insolvency solution to get back on your feet as soon as possible.
How Long Will My Name Stay on the Register?
The duration for which your name stays on the register depends mostly on the choices you make.
For one, it depends on what solution you opt for. As of right now, UK law states that your name will stay on it for 3 months after your desired solution ends.
A DRO or IVA will stay on it for up to 3 months after they’re completed. If you file for bankruptcy, you’ll be given 3 months after you’re discharged, which is when the financial restrictions you face when bankrupt are lifted.
How to Get Out of the Register? – Insolvency Solutions
If your information is listed on the individual insolvency register, you have a few insolvency solutions you may follow to eventually get your name off it.
This is a legal procedure that, if successful, allows all your debts to be written off if you’re able to prove that you don’t have the required assets to pay off their debts.
This, of course, comes at a cost, as your existing assets will be used to contribute to your debt payments, and you’ll face severe financial restrictions throughout, such as a hit to your credit score.
To declare bankruptcy, you have to send an application to the Insolvency Service that includes your income and specifics about what you owe. If your application is accepted, you can no longer be pursued for debt repayment by creditors and debt collectors.
- Individual Voluntary Arrangements
In England and Wales, Individual Voluntary Arrangements or IVAs give you the option to make partial repayments for a specified duration to your creditors. They also prevent them from pursuing legal options against you.
While an IVA register does give you a lot more control over your assets than bankruptcy, it has extremely strict conditions for qualification. It involves an IVA register as well. The IVA register keeps a record of this solution.
Even after you provide your assets, creditors, debts, and income, you will only get an IVA if the creditors that hold 75% of your total debts agree to the solution.
You make consistent payments to your insolvency practitioner, who then divides the amount amongst your creditors. This is recorded on the IVA register.
- Debt Relief Orders
The last solution you can choose for debt relief in the UK is a Debt Relief Order (DRO).
As for the specifics, a DRO is valid for a full year and prevents any creditor from pursuing legal options against you while it is active.
There are some downsides to opting for a DRO, though.
For one, it only caters to specific situations and specific types of debt. But secondly, it may significantly hurt your credit rating, which may cause you problems in the future.
FAQs – All You Need to Know about Debt and Debt Relief
Who can view my details on the insolvency list?
An insolvency list is a public record, so technically, anyone can view the insolvency list.
However, your information will mostly be viewed by your creditors, credit reference agencies, and the people involved in your solution.
Can I keep my details private while still being insolvent?
In England, you can’t keep your insolvency information private, since they will be vital to your creditors and others involved.
However, if you feel that there’s active harm or danger to you if your details are published on the register, you can submit an application to request that your information, such as your address, trading name, or email address are kept private.
Which solutions are shown on the register?
Bankruptcy, IVAs, and DROs are shown on the register. If you choose one of these insolvency solutions, it will show up on it.
However, informal solutions, such as a Debt Management Plan, will not show up on it.
How does being on the register affect my credit report?
Details of your bankruptcy, IVAs, and DROs are listed on your credit report for six years after your insolvency solution ends.
These details signal troublesome financial activity to lenders, which makes you a risky target to lend to. Your credit report may be seriously affected by this information once you’re entered on it.
Can I rebuild my credit report after getting off of the register?
Yes, you can.
While it is true that insolvency solutions are listed on your credit report for six years after the solution ends, which is a serious red flag for lenders, you can rebuild your credit report through responsible financial activity, such as borrowing and repaying responsibly.
I understand how frustrating it can be to find yourself in a situation where you’re on the insolvency register and don’t know what you can do about it.
It’s very important to be aware of the solutions you can follow.
If you need debt advice or more guidance on this topic, feel free to reach out!