FAQs

How does debt management affect my credit rating?

If you already have a debt problem, it is likely that your credit rating has already been affected. If you are unable to meet the original contracted terms of your credit agreement your creditors will register that you are in default. This will be recorded on your credit file and will normally be retained on your file for 6 years.
 

What happens initially when I contact you?

Once you contact us an adviser will talk to you about your situation and answer any queries that you may have about the possible Debt Solutions available to you.

If possible we will ask you to have the following information available so an assessment of your circumstances can be made.

Details of ALL of your creditors, including account numbers and recent balances
Your income and expenditure details
Details of any county court judgements
Mortgages and secured loans
Hire Purchase Agreements and Leases
Maintenance and CSA payments
 

How much will my creditors get each month?

This will depend on how much disposable income you have (i.e. the money left over after paying all your living expenses) and how much is owed to each creditor.
 

How can I pay into my Plan?

Payments are made monthly. There are three methods you can use:

Cheque
Standing Order
Bank Giro

Remember, until your Debt Management plan is established you MUST keep paying your creditors what you can afford each month.

It is IMPORTANT that you do not increase your debts at this stage by obtaining further credit or borrowing more money through existing facilities.
 

My reduced payments are less than my interest charges, does this mean I'll be paying forever?

Many lenders will freeze interest charges when dealing with fee-free debt managers. This they do because they can see that you are making a genuine effort to pay your debts and are doing so with the assistance of a professional organisation.
 

How do I know I'll be able to maintain the reduced monthly payments?

Any repayment proposal is agreed between you and your debt manager in advance. It is based on the information you have supplied and takes into account all your finances. That is why it is imperative that you include all the information asked for.
 

How long does the Plan last?

That will be determined by how much is owed and the amount you can realistically afford to pay your creditors each month. You’ll be given an indication of the likely length of the plan at the outset, but it will always be dependent on your creditors freezing interest and other charges on your accounts and your circumstances not changing.
 

What happens if my circumstances change?

If this should happen whilst the plan in place, please let us know immediately. Depending on your situation a revised repayment plan will be negotiated with your creditors. As a matter of course, we will annually review your plan with you and amend your monthly payment if necessary.
 

Is my home at risk?

If you’ve got a mortgage, allowance for this is made in determining how much you can afford to offer your unsecured creditors through the plan. This should leave you with enough money to continue making your mortgage payments. Providing you do this, your home should be safe.
 

What is an IVA?

It is the name given to a formal arrangement with creditors. It allows someone who is in financial difficulty to make a proposal to settle his/her debts within a reasonable and fixed period – normally five years.
 

Does it mean that my debt is reduced?

Yes in most cases, but it will depend on a high proportion of creditors agreeing to reduce the debt.
 

Is it a loan?

No, it is an arrangement which is negotiated between you and your creditors to pay either a lump sum or as is more usual, an affordable monthly payment over an agreed period.
 

How much will my monthly payments be?

The amount of monthly repayment will depend on what you can realistically afford to pay back after taking into account all reasonable living expenses.
 

How much are the charges?

Charges will vary according to the amount of debt and repayment period. However, they are included in the monthly payments and you will be informed of these charges when the arrangement is agreed.
 

Will my employers be approached?

No – Only your creditors.
 

What is a debt management plan?

It is a plan tailored to help a person's debt problem. It involves working closely with clients to reach an agreement on how much they can afford to pay each month. We will work as a mediator with your creditors and negotiate sensible repayment terms until all parties are happy with the decision.
 

How will I know my creditors are being paid?

They will continue to send you your statements. As long as you send your payments to us, these statements will show payments from you, who is being paid and by how much.
 

What does it cost?

There is a monthly management fee for the plan and will depend on the amount paid each month. However, the charges will be fully explained before such a plan commences.
 

What is an Administration Order?

An administration order is a court order placing a company that is, or is likely to become, insolvent under the control of an administrator following a petition by the company, it's directors or a creditor. The purpose of the order is to preserve the company’s business and assets to allow a reorganisation or ensure the most advantageous realisation of its assets whilst protecting it from action by it's creditors.
 

What is Joint and Several Liability?

If more than one person enters into a credit agreement then both are liable for the full amount. For example, after divorce or separation, both parties can be pursued for the outstanding amount. This also applies to rent arrears on joint tenancies, arrears on joint mortgages, Council Tax payment and water rates on properties that have been jointly occupied.
 

What is a Default Notice?

A notice that must be issued by a creditor before he can start legal action to recover a debt. It states the amount of money owing and the amount required from the debtor to put things right. It asks for payment in full in seven days. If the seven days pass without payment, the creditor can take court action.
 

What is a Liability Order?

If you fail to pay your Council Tax, your local authority can apply to the Magistrate's Court for a Liability Order. The Order gives the Council extra powers to enforce collection of the money.
 

What are Priority Creditors?

Those where non–payment could result in loss of property, essential services or imprisonment, e.g. mortgage, rent, gas, water, electricity, Council Tax, court fines and maintenance.
 

What are Non Priority Creditors?

Non–payments to these creditors (sometimes known as secondary creditors) would incur less severe consequences than the non–payment of priority creditors.
 

What is Secured Lending?

A loan where security is given by the person borrowing (the security is usually property). If you fail to repay a secured loan the property maybe repossessed. These debts take priority over unsecured lending.
 

What is a Time Order?

Allows a County Court to make changes to the terms of a regulated agreement, if it appears to be just. The court can reduce the repayment rate and the interest rate. Time Orders are normally only made where there is a temporary financial difficulty and if you are likely to be able to return to making full contractual payments.