Debt Management Plan faqs | Debt Advice

What is a Debt Management Plan?

A Debt Managagement Plan is an informal arrangement between you and your creditors which enables you to reduce your monthly debt repayments without having to obtain further credit. You can enter into a Debt Management Plan yourself or we can arrange it for you. We deal directly with your creditors and negotiate all payments on your behalf. We try to get all interest and charges frozen wherever possible. If your debts aren't particularly high your creditors may find Debt Management favourable over the likes of an IVA. Debt Management can be an appropriate solution if you need a temporary fix or if you are struggling and need a more permananet fix.

What are the Benefits of a Debt Management Plan?

  • It is an informal and flexible arrangement tailormade to suit what you can afford.
  • You will have reduced monthly payments.
  • You may get crippling interest and charges frozen.
  • You do not have to involve your property if you are a homeowner.
  • You will repay all your debts.
  • It can be preferred by your Creditors.
  • Your details will not be put on an Insolvency Register as you are not deemed insolvent.
  • You could prevent creditors taking any further action such as CCJ's. You are seen to be dedicated to paying the debt.

Can anyone get a Debt Management Plan?

Yes. Anyone can enter into a Debt Management Plan, as long as you have some sort of monthly disposable income, after your living expenses have been taken out.

What debts are covered by a Debt Management Plan?

A Debt Management Plan deals with all your unsecured debts which are debts like loans, credit cards, store cards and bank overdrafts. If you have secured debts such as a mortgage or HP agreement, these will be prioritised when we are working out your disposable income from your in your income and expenditure. We will always help and advise you with how to deal with your secured and priority debts.

How long does a Debt Managment Plan last and how much will I have to pay?

The length of a Debt Management Plan really depends on several things:

  • The amount of your debt.
  • The level of your repayment.
  • The purpose of the arrangement - is your situation temporary or permanent.
  • Your Creditors - Your Creditors can opt out at any stage of the process due to the informailty of the agreement.
  • You - Due to the informality of a Debt Management Plan you can opt out at any stage.
  • If you need a Debt Management Plan for a more permanent arrangement, we can determine the approximate length of the arrangement.

Will my payment remain the same throughout the Debt Management Plan?

We aim to keep your payments the same. Your payments and your situation will be reviewed by your assigned finance manager periodically. If your income and expenditure fluctuate and your situation improves, there may be an opportunity to increase your monthly Debt Management payment and this will shorten the life of your Plan. However, if your situation deteriorates, it may be possible to temporarily reduce your payments until they improve.

How much will a Debt Management Plan cost me?

Your first initial monthly payment into your Debt Management Plan will be retained as the set up fee. Thereafter 15% of each monthly payment will be deducted as our administration fee, which is lower than other Debt Management Companies.

How will a Debt Management Plan affect my Credit Rating?

Entering into a Debt Management Plan should not have a negative effect on your credit rating because you creditors will be receiving a payment every month. However, if you are thinking about entering into a Debt Management Plan, then it is likely that your credit rating is already affected. This is because you have been struggling to keep up to date with repayments and your creditor/s will have registered the missed payment/s on your credit file.

What happens to my credit interest in a Debt Management Plan?

As well as negotating your payments with your creditors, we will try and get your interest and charges frozen. While we cannot guarantee this as your creditors are not legally obliged, we will try our best wherever possible. We have a good relationship with most creditors which can prove helpful in these circumstances.

Will the creditors accept my offer?

We are extremely successful at negotiating with creditors and have a proven track record of getting offers accepted. We have a dedicated Creditor Liaison Department who will negotiate with your creditors on your behalf. You will be assigned a dedicated Personal Case Manager who will keep you informed every step of the way.

Other Debt Advice faqs

- Unsecured Debt faqs
- Secured Debt faqs
- IVA/CVA (Individual and Company Voluntary Arrangement) faqs
- Administration Order faqs
- Trust Deed faqs
- Bankruptcy faqs
- Sequestration faqs
- Other/General Debt faqs

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