It’s important to get debt advice as soon as possible.
The adviser will review your financial situation. They’ll discuss your income and expenditure. They’ll discuss your debts and any assets that you own.
This information is used to identify suitable debt management solutions which will be clearly explained to you. The adviser will tell you about the pros and cons of each debt solution.
Our experienced and qualified advice team can help you with this debt advice process. Please get in touch to receive high-quality debt advice.
Your financial status may remain under review during the course of your police career.
A review of how you’re managing your debt is especially likely if you apply for promotion or if your work is of a particularly sensitive nature.
Debt Management Options for Police Officers
Debt Management Plans
A debt management plan is an informal type of debt solution and isn’t personal insolvency.
Your creditors are asked to agree to a reduced repayment and to freeze interest and charges.
A DMP lasts for as long as it takes to fully repay your debts (no debt gets written-off).
You make a single monthly payment to the provider and they issue payment to your creditors. They also deal with your creditors on your behalf.
This debt solution may be useful if your overall debt-level isn’t severe. With help from creditors, debts can get repaid in a reasonable period of time.
Debt management plans are often used by homeowners because (unlike personal insolvency) assets like your home or car aren’t taken into account.
If your partner or spouse also has debt problems you can use a joint debt management plan together.
Debt management might also be suitable for those who need short or medium-term help. This could apply if you’re waiting on the payment of a police pension lump sum that you plan to use to clear your debts in the future.
IVA (Individual Voluntary Arrangement)
Bankruptcy can be the quickest and cheapest way for a police officer to deal with debt. If your debt problems are severe, consider this option.
You will usually get discharged from your debts after one year. If affordable, you will be expected to pay towards your debts for three years. The application fee is £680 in England and Wales
Bankruptcy applications are submitted online and there’s no need to attend Court.
Certain assets (like your home or vehicle) get taken into account and a sale of such assets by the bankruptcy trustee is possible.
Debt relief orders (also known as a DRO) help people with few assets and little spare income.
Your debts must total £20,000 or less and they aren't available to homeowners.
You will usually get discharged from your debts after one year.
The application fee is £90 and there is nothing to pay thereafter.
Borrowing money to consolidate your debts is another option to consider. Consolidation can be an effective strategy if your new repayment is affordable and you aren’t tempted to get into further debt afterwards.
Debt consolidation is generally considered to be risky and you are advised to obtain expert debt advice beforehand to check the new repayment is affordable.
If you live in Scotland you can choose between a different set of debt solutions.
The debt arrangement scheme works in a similar way to a debt management plan (see above). The key advantages of DAS over a DMP are guaranteed frozen interest and legal protection from creditors.
Protected trust deeds work in a similar way to an IVA (see above). You’ll have to pay what you can afford for at least four years before any unpaid debt gets written-off.
Bankruptcy in Scotland has a lower application fee than the equivalent process in the rest of the UK. If you have any surplus income after paying your household bills, you’ll be required to contribute towards your debts for four years.
Bright Oak has helped policemen and policewomen since 2007. Our debt management advice and has helped them to overcome their debt worries.
We understand that you may be feeling anxious or embarrassed. Our advice team is sympathetic and friendly. All advice is provided on a confidential basis.
For friendly expert debt advice please contact us.
Author: Andrew Graveson
Qualified Debt Adviser & Bright Oak’s Founder
Page Last Updated: 26/07/2020