All too often people fall into debt. Sometimes it happens because of unexpected costs and sometimes it’s because of budgeting problems. With the best intentions, you might find yourself spending more than you can afford, or even selling your belongings just to make ends meet. But now there is a new way for you to tackle debt – get it written off! This blog gives information on how to get your debt is written off, as well as some helpful tips on handling your finances going forward.
What is a debt write-off?
A debt write off is when a debt is forgiven or canceled. The person must have been insolvent (i.e. they couldn’t repay the debt regardless of the amount). They must have made an application for insolvency and it must not have been accepted. There are many different types of debt, so eligibility may vary depending on the type of debt that is being written off.
Which debts can I claim?
You may be able to claim a debt if it was written off by HMRC or accepted in the settlement of a case. If you’re unsure what debts can be claimed, this is the place to start!
Individual Voluntary Arrangements (IVA)
A debt write-off is typically a voluntary arrangement between the debtor and their creditor, in which the debtor pays a lump sum of money to clear their debt. Personal voluntary arrangements are an alternative to bankruptcy for more than 90% of UK consumers who owe money to creditors and are struggling with repayment.Â
If you’re struggling to repay your debt, IVA might be perfect for you. IVA is an agreement with your creditors that lets you repay some or all of the debt in installments over a period of four years. If you think IVA could help you, talk to your lender about it. It’s worth doing if it will save you from the consequences of bankruptcy
How do I apply for a debt write off?
To be eligible for a debt write off, you must have been able to afford repaying the debt times three. You should also have tried to repay the debt before applying for a write off or you will not be able to get the full amount written off. To apply for a write off, you need to fill out form I817 and enclose it with your tax returns.
Tips for getting debt written off
Some debt write-offs are not the end of your financial problems and some may even be illegal. However, there are some exceptions and loopholes which can help you get debt written off. The first tip is to be ready to show your creditor that the debt has been paid or that it’s being negotiated with a third party. For example, you could use a document such as a bill of sale or a transfer of property deed to prove this.
Conclusions
Debt can be forgiving. If you’ve got debt, it’s worth seeking help. Here are some common questions and their answers in an effort to help people get relieved from the burden of their loans.
