Our sister company National Debt Relief handle our Debt Management side of things. If you contact us an advisor will run through a brief assessment in order to advise you of all available options for dealing with your debts. If you think Debt Management is your best course of action, then we will gather the required documents and begin negotiations with your creditors.
When the plan is set up, we will distribute your monthly payment to your creditors each month. You will only have to make one payment each month and then we then divide that payment between all of your creditors, which means you don’t have to contact them directly.
We will oversee your plan regularly to make sure you are happy with the payments or in case you have any change in circumstances. You will have the option to cancel the plan at any time, should you wish.
The disadvantages of a debt management company are that sometimes their upfront fee can be quite high. This can leave you with less money to pay off your debts, which is counterproductive to the intent of paying off your debts in the shortest time possible. We do not charge any upfront fees or set up fees, but we do charge a monthly fee for running the plan, which comes off your agreed monthly repayment towards your debts. We are one of the cheapest debt management companies in the industry and are very transparent about what we charge. You can read more about the costs involved in the following FAQs.
If you use any debt management company make sure they are trustworthy and also make sure to review the agreement very carefully before signing anything. The debt management company should provide an overview of the fees involved and explain them in detail. Sometimes they will be unable to deal with all of your creditors so make sure you know which ones you may still need to contact.
If you need advice about a debt management plan then get in touch and one of our advisors will be happy to answer any questions you might have.
A Debt management Plan is not an official and formal debt solution. It offers a flexible and informal approach to dealing with your debts and because of this companies must be highly regulated and transparent about exactly what their service entails. A DMP is seen as more of an "understanding" between you and your creditors. Whilst a creditor can revert to the original terms of your debt at any time, most will be happy to receive the reduced payment as they see it as you making an effort to repay your debts in the most affordable way possible.
Certain questionable companies have been known to enter debtors into an agreement when an IVA or bankruptcy would be a much better alternative, so if you can find a good company that a friend or family member has dealt with in the past this might be an avenue to pursue. A respectable company MUST advise you of all options that are available to you.
A good debt advice service will only suggest you pay what you can really afford in your debt management plan after your monthly expenses have been calculated. Make sure that when you are discussing the plan that you are sure you’ll be able to make your repayments each month.
You can do your own Debt Management Plan and negotiate with creditors yourself, where you will pay no fees. There are some companies that offer a free debt management service also.
If you choose to do a Debt Management Plan with us, all fees will be discussed before you begin any plan.
We do not charge a set up fee for your debt management plan, which means your payments will start going towards to your debts/creditors straight away.
For managing your plan we will deduct a monthly management fee from your payment. Our monthly management fee is charged at £25 per month plus £2 per account per lender per month (but will never exceed £50 per month, even if you have a lot of creditors).
The monthly management fee covers the ongoing work involved in setting up and keeping your debt management plan running smoothly. This includes:
Your fees also cover a personal case manager who will be responsible for making sure your plan runs smoothly. If it looks like you cannot afford your monthly payments any more, we can renegotiate with your creditors - they may agree to accept smaller payments if it looks like the best way of bringing your debt management plan to a successful conclusion.
Our Debt Management Plans are provided by our debt management company National Debt Relief who are licensed to carry out these activities.
From time to time we may refer you to other service providers or charities such as the CAB.
The Money Advice Service
You can get free debt advice from the Money Advice Service – an organisation set up by the Government to offer free and impartial advice to those in debt. Click here for more information.
Creditors tend to favour a Debt Management Plan over other solutions as they have the advantage of getting their money back in full, albeit over a longer period of time. This if often a favourable option for them, rather than letting you go bankrupt where they may not get any money, or to entering an IVA where they may not receive full repayment.
For this reason, creditors are often willing to enter into these unofficial agreements.
Debt management plans are less intrusive than IVAs or bankruptcy. As long as you can pay the amount agreed each month, how you live your life and what you spend your money on is entirely up to you. Changes in your financial situation in an IVA have to be reported to your Insolvency Practitioner whereas in a debt management plan, as long as you are making the payments you will be left alone. Your situation will be reviewed annually to see that you are making the most affordable payment possible and that there are no changes in your circumstances.
Though debt management plans may last longer than the alternatives, the level of intrusiveness and severity is so much less that they are a good option for many people.