Solicitors are just as exposed to debt problems as any other professional. Poor personal financial management might be an issue. More often, debt builds as a result of major personal changes or a poor trading period.

 

There are steps that legal advisers can take to address their debts. They must however be conscious of the professional requirements that they are subject to.

 

Bright Oak has worked with many solicitor (and barrister) clients to establish a debt management plan. Please contact us if you’d like to learn more about this option.

 

Getting Debt Advice

 

It’s important not to delay getting debt advice. Financial problems tend to deepen while they are left unaddressed.

 

The adviser will ask about your current financial status. This will include detail about your income, bills, and personal expenditure needs. It will also include detail about your debts and any assets that you own.

 

An adviser will then be able to advise you about your options. It’s likely that more than one will be available to you. The advantages and disadvantages of each are discussed.

 

Getting Professional Advice

 

You may also wish to reach out for specialist sector guidance. This may provide reassurance that your debt plans will not curtail your professional activities. Sources of help include:

 

Law Society Pastoral Care Helpline

SBA (The Solicitors’ Charity)

SRA Professional Ethics Helpline

 

You must maintain your fitness for practice. Certain debt solution options (identified below) will be riskier than others in this respect.

 

Employer Considerations

 

If you are employed, you should check your employers’ requirements.

 

You may be subject to contractual restrictions on how you can deal with your debts. You may be subject to disclosure requirements.

 

Larger firms might make internal or external support services available to you.

 

Debt Management Plan

 

Debt management plans are an informal way to address debts. They are not formal insolvencies. No public register of users exists.

 

You pay what you can reasonably afford towards your debts. Priority is placed upon covering your household bills and other expenditure.

 

Your creditors are asked to accept a reduced payment. They are asked to suspend interest and charges. They’re not compelled to accept such an arrangement. However, consumer credit lenders do typically respond positively to fair debt management plan proposals.

 

This option is often attractive to solicitors.

 

Bright Oak is a direct provider of debt management plans. Please contact us if you’d like to discuss this option in detail.

 

Read more about debt management…

 

IVA – Individual Voluntary Arrangement

 

An IVA is a formal insolvency process. You make a monthly payment for an agreed term. The term is typically five or six years. If you complete an IVA, any included unpaid debt gets written off.

 

You’re expected to report your intention to begin an IVA to the Solicitors Regulation Authority.

 

The SRA will take a case-by-case approach in this situation. It is possible that conditions will be imposed upon you if you proceed.

 

Some restrictions might curtail your ability to practice. Others might require you to work in a different way.

 

Read more about individual voluntary arrangements…

 

Bankruptcy

 

Bankruptcy can be the cheapest and fastest way to resolve a serious debt problem.

 

If you become bankrupt (or get made bankrupt) it’s likely that your certificate to practice will be suspended.

 

This optional is unattractive to most solicitors.

 

Read more about bankruptcy…

 

DRO - Debt Relief Order

 

A Debt Relief Order (DRO) is an alternative to bankruptcy. It can also be a cheap and fast way to resolve a debt problem.

 

Using a DRO is likely to result in similar consequences to bankruptcy.

 

Read more about Debt Relief Orders…

 

Solicitors Living in Scotland

 

Different debt solutions apply in Scotland. In terms of the consequences for Scottish solicitors we advise that:

 

Protected Trust Deed: Likely to be seen similarly to an IVA (see above).

 

Sequestration: Likely to be seen similarly to bankruptcy (see above).

 

Debt Arrangement Scheme: This option works similarly to a debt management plan. However it is a formal plan and a public register of users exist. Seek guidance from the Law Society of Scotland before proceeding.

 

Why Contact Bright Oak?

 

Bright Oak is a fully authorised and regulated provider of debt advice and debt management plans.

 

We’ve assisted a significant number of lawyers to address and resolve their debt issues.

 

Our service is professional and confidential. You’ll be speaking to a single dedicated professionally qualified debt adviser (rather than being passed around a call centre).

 

Please get in touch today for professional and effective advice.

 

Author: Andrew Graveson – Qualified Debt Adviser & Bright Oak’s Founder

 

Last Updated: 18/07/2019

 

Get Advice

Please fill in the form below. We will call you back as soon as possible.

Submitting Form...

The server encountered an error.

Form received.

Social Media

More Reading

Free-To-Client Debt Advice

The Money Advice Service provides details of organisations that offer free debt advice and services.

Debt Management Protocol logo link Brightoak Twitter

(c) Bright Oak Ltd. Company Number: 06774006. Data Protection Registration: Z1657982.

Telephone calls may be monitored or recorded. Authorised and regulated by the Financial Conduct Authority.

Bright Oak, Cardiff House, Priority Business Park, Barry, CF63 2AW. Tel: 02920 492661.

Law Society Pastoral Care Helpline

SBA (The Solicitors’ Charity)

SRA Professional Ethics Helpline

Debt Arrangement Scheme: This option works similarly to a debt management plan. However it is a formal plan and a public register of users exist. Seek guidance from the Law Society of Scotland before proceeding.

Debt Management Protocol logo link Brightoak Twitter

Call

02920 492661

0800 0437222

Debt Management Protocol logo link Brightoak Twitter

Debt Management Protocol logo link Brightoak Twitter