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Debt Solutions


There are various solutions available if you are in financial difficulty these include:

Debt Relief Orders

If you are unable to repay your debts, a Debt Relief Order could give you a fresh start. In order to qualify you must:

  • Live in England/Wales or have lived in or carried on a business in England/Wales during the last three years
  • Have debts of no more than £15,000
  • Have less than £50 per month spare after you have made essential payments
  • Not have any assets of £300 or more

How do I make an application?
An online application form is completed by one of our experienced debt advisers. Before we are able to complete this application we need to

  • Request a free credit report from Experian
  • Obtain up to date balances from your creditors

Once this information has been received and we are satisfied a Debt Relief order is suitable for you we will then create the application however before the application can be submitted there is a fee of £90 to be paid to the Insolvency Service. 

What debts can be included in a DRO?
Most debts can be included within a DRO however there are some conditions.

How do I pay the DRO fee?
We will give you a bar code which will allow you to make the payment at a post office or paypoint. The fee can be paid in instalments however it must be paid in full within six months of the first payment being made. 

For example: You pay £20 on 15/01/2012, you will then need to pay the remaining £70 by 15/06/2012

What happens when the DRO fee has been paid in full?
Once you have advised us the fee has been paid in full, we will submit your application for you. We should then receive an email from the DRO unit within 48-hours to confirm whether the application has been approved / rejected.

If your application is approved we will write to you to let you know. We will also give you a full copy of your DRO application along with the reference number you will need to give your creditors if they contact you.

What happens once the DRO has been approved?
Your creditors will not be able to take any action against you to recover the money during the moratorium (suspension) period which is usually 12 months. Once 12-months is over your debts will be written off.

External Links
Insolvency Service Guide to Debt Relief Orders

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Debt Management Plans

A Debt Management Plan is an informal arrangement between you and your creditors (the people you owe money to) where you agree to repay your debt. The amount you pay will depend on how much money you have left each month once you have paid for essential things. The amount you pay will be shared fairly between your creditors.

For example:

You owe three creditors money:
Creditor one = £1,500
Creditor two = £800
Creditor three = £250

Your total available income is £15 per month therefore you would pay:
Creditor one = £8.82 per month
Creditor two = £4.71 per month
Creditor three = £1.47 per month

What we do for you
Before we are able to calculate how much you pay to each of your creditors we will first of all need to prepare an income and expenditure statement which will show how much “spare” money you have each month.

We will then need to write to each of your creditors to get up to date balances. When we do this, we also request they freeze interest and charges to the account to enable the debt to be reduced.

Once this information is received and you have confirmed your spare income to be correct we would then make an offer of payment to your creditors. 

If the offer of payment is accepted we will advise you of this. We will also be able to identify the different payment methods available to you to allow you to make the payments easily and on time.

We are also able to tell you how long it will take to repay your debts to allow you decide whether this is the best debt option available to you.

Further information regarding Debt Management Plans

  • You are responsible for making the agreed payments direct to your creditors as we do not have the facilities available to do this for you
  • Your creditors can withdraw this agreement at any time
  • Creditors do not always agree to freeze interest and charges
  • Creditors do not always accept offers of payment

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Administration Orders

If you have at least one county court judgement, you owe at least two creditors and your debt is below £5,000 you can apply to the county court for an administration order. Not only are all of your debts treated as one, an administration order will also prevent your creditors from taking action against you without permission of the court.

You make one monthly payment to the court who will divide this equally between your creditors. An administration order is free however the court will take an administration fee (which is currently 10p in every £1) which will be taken from your monthly payment.

For more information regarding this please contact us.

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Individual Voluntary Arrangements

An Individual Voluntary Arrangement (IVA) is a formal agreement, which is made between you and your creditors under a legally binding agreement where you would pay a certain percent in the pound to your debts.

A nominee (usually an Insolvency Practitioner) sets up the arrangement. An Insolvency Practitioner is an authorised person who specialises in insolvency, usually an accountant or solicitor.

More information on Individual Voluntary Arrangements is available from the Direct Gov website.

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Debt Consolidation Loans

Debt Consolidation involves taking out a new loan or increasing an existing loan in order to pay off multiple debts.

If you are in financial difficulty this may not be the best option for you as it could make your situation worse.

If you are a homeowner think carefully before borrowing money to pay off your debts as this kind of borrowing could result in you loosing your home.

Gateshead Council are unable to help you apply for a debt consolidation loan, you would have to do this yourself.

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Bankruptcy is a legal process which deals with debts that you cannot pay. There are three ways you can be made bankrupt:

  1. A creditor, to whom you owe more than £750 , could apply to make you bankrupt
  2. You can apply to make yourself bankrupt
  3. You have recently been in an IVA and this has failed, the IVA supervisor could apply to make you bankrupt

The current cost of bankruptcy (January 2012) is £700 in total which is made up of £175 court costs and £525 administration costs (this is also known as the Official Receivers deposit). If you are on certain benefits or your annual income is below a certain amount you may qualify for a remission of the court fees.

In order to apply for bankruptcy you need to prepare a bankruptcy petition. Once this has been done and you have the funds available to pay for your bankruptcy, you can then make an appointment with the court to present the petition.

Our experienced debt advisers can help you to complete the bankruptcy petition and make you an appointment with the court (usually Newcastle Law Courts on the Quayside) to present your petition.

For more information about bankruptcy and what it could mean for you please use the links below:

External Links
Insolvency Service
Dealing with Debt How to Deal with Creditors
A Guide to Bankruptcy

External Documents
Bankruptcy Form (6-27)
Bankruptcy Form (6-28)

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Contact Us

Debt Advice
Housing Services
Civic Centre
Regent Street

Opening Hours
Monday to Thursday 9.00am to 5.00pm
Fridays 9.00am to 4.35pm

Telephone: 0191 433 3174