Debt Management FAQs

What is a debt management plan?

A debt management plan is an informal agreement designed to help someone who is struggling to meet their monthly debt repayments and to give them the opportunity to make a single more affordable monthly payment via a debt management company.

In return for a management fee the company passes these payments to the creditors until their debts are cleared. The most important part of the management companies duties should be to negotiate an interest and charges freeze on the debtors outstanding accounts and then regularly ensure that creditors continue this freeze during the term of the DMP.

They should also ask creditors not to take any legal or recovery action providing the debtor keeps making their regular payments. Amongst their duties the management company also agrees to handle/reply to creditors letters and enquires.

Call the debt solutions helpline on: 0845 519 6093

Is a debt management plan a loan?

A debt management plan is not a loan you are not borrowing any money, just clearing your debts at a more comfortable rate

Will I be credit checked?

No, Since a management plan is not a loan you will not have to be credit checked.

Will I keep getting letters and phone calls from my creditors?

It is highly likely that you will still receive letters and phone calls from your creditors as the agreement reached is informal and therefore not legally binding. However, these letters and calls should become less frequent the longer the plan is in place and the creditors realise they are receiving regular payments.

Can I pay more or less if I want to change payments?

Yes, because the plan is informal you can alter your payments to suit your circumstances. If your circumstances change you can raise or lower your payments.

Do I need to change banks?

Maybe, If your current bank is one of your creditors the you should change your bank to one that you do not owe any money too. If you fail to do this there is a strong possibility that when your wages are paid into your current bank they will keep your money and offset it against what you owe them.

Do I need to cancel my direct debits?

Yes, You should cancel your direct debits to your creditors to avoid the possibility of them being paid twice. However, you should continue to pay your normal household bills, car insurance etc.

How will I know my creditors are being paid?

You will continue to receive statements from your creditors showing the balance on your accounts. This is your opportunity to confirm they have frozen the interest and charges on your accounts.

Will this affect my credit rating?

Yes, It is more than likely that the debt management plan will have an effect on your credit rating as you will not be making your contracted repayments. You should bear in mind that if you are currently experiencing debt problems it is a possible that one or more of your creditors may have already recorded this information with a credit reference agency such as Equifax or Experian.

Does it make a difference if I am a homeowner?

No, It does not make a difference whether you are a tenant or homeowner or if you are living with your parents.

Do I have to tell my partner?

No, but, we believe that it is always best to be honest with your partner. However, you only have to tell your partner if you have shared debts and/or you need your partner's income to be taken into account to support a management plan. Everything between you and ourselves is confidential so we will not inform you partner.

Does a debt management plan cover all of my debts?

A management plan can only cover your unsecured debts and arrears, such as Credit Cards, Personal Loans, Store Cards and Catalogues.

What is the difference between a secured and unsecured debt?

A secured debt is a debt secured against an asset that you own. Typical secured debts will be a mortgage, a secured loan, a car loan, etc. An unsecured loan is any loan not secured on an asset, such as a bank overdraft, a personal loan, a credit card, store card, etc.

Do creditors always accept reduced payment offers?

Creditors do not have to accept any offer of repayment below the contracted minimum. However, they are normally prepared to accept reduced repayment offers where you are able to demonstrate that the offer you are making have is reasonable and that you are committed to repay your debts.

Can creditors refuse to accept payments under a debt management plan?

No, It is a principle of law that creditors must accept all offers of payment we make to them on your behalf.

Will I receive a Default Notice?

Yes, You will more than likely receive default notices because you will be in default on your original credit agreement a creditor is therefore entitled to send you a Default Notice. Creditors send out Default Notices to protect their own legal position and they are often perceived to be worse than they really are.

Can debt solutions help me get out of debt?

YES we can. Everyone’s personal situation is different and each debt solution is different so we need to work out which will best suit your financial needs.

We will complete a FREE 20 minute fact find with you to work out what your earning and spending and this will let us know how much you can afford to pay to your creditors and also which debt solution is best for you to help you get out of debt. You are under no obligation but I am sure you will be 100% happy with what out debt advisors can do for you and we have the lowest debt managenent fees in the industy

We pride ourselves in our friendly, professional approach to finding the right debt solution for every one of our clients, which is honest, confidential and always the ‘best advice’ based on your individual circumstances.

If you would like to speak to one of our friendly, professional debt experts about any of our debt solutions you can either call our debt solutions helpline on: 0845 159 6093 or complete our online contact form and one of our debt advisors will call you back within the hour.

Start you debt free life today! with one of our debt solutions.

Debt Management | Individual Voluntary Arrangement | Protected Trust Deed | Bankruptcy

Also have a look at out "DEBT FEEs" chart and see what the more popular debt management companies are charging.