U.k. Debt Consolidation

The British are every bit as in debt as Americans

. Statistics found that 47% are worried enough about credit debt that they are seeking counseling and solutions that will help eliminate it. The options available are slightly different from the United States, and some just have different names but arrive at the same end for the consumer.

Just as in the United States, the U.K. has bankruptcy, bet consolidation and debt management. There is no such thing as debt settlement like in America. And just as here, bankruptcy is the one thing everyone hopes to avoid. It is a much more common thing for businesses to use than the individual consumer.

One of the options that is very different is called a Debt Relief Order or a DRO. It is for people who have no hard assets like a home and who also have little income with which to pay bills. It is a much cheaper option than bankruptcy, and is a process that uses an intermediary with creditors. There is no court hearing, and they are able to apply and receive acceptance online in most cases.

Basically, all accounts are frozen for a year, and during that time a creditor may take no action against the borrower. After twelve months, the debts are written off. While there is a $30,000 limit on this program, it also has to be proven that the consumer has less than $100 per month in expendable income, and has no assets like a motorbike or even a television that is valuable. A DRO can include rent, utilities, phone, and even taxes. They do not make all the paperwork easy, but for a consumer in need, it is certainly a way out that isn't available in the U.S.

Also in the United Kingdom, the rules and laws changed based on area of residency. The difference in laws from Scotland, North Ireland, and England can be very different as are the solicitors who deal with them. The laws do seem very easy compared with the United States, but they are largely because of the differences in government. The U.K. has many more social services - like national healthcare, for instance - available to its citizens. Those services are afforded by an extremely high tax rate that is not seen in this country. Helping citizens through insolvency or high credit debt is a service of the government, which is not seen in the U.S. bankruptcy excluded.

by: Vicki Hall

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