It’s an informal agreement with your creditors to repay your debts back in full at a rate you can afford based upon our review of your personal circumstances. The payment is based on your level of unsecured debt and on the assumption that creditors will freeze interest and other charges. If the details change significantly, for example, if creditors confirm that the balances are much higher, then we will provide you with updated details and you will have a further opportunity to change your mind about the plan.
Your plan only includes your unsecured credit arrangements. You will still need to make sure that you pay “priority debts.”
These are items of expenditure that can have serious consequences if you don’t pay them. You could face eviction, loss of your home or other assets, fines or even imprisonment, depending upon the specific debt. The following are areas of priority expenditure: rent, mortgages or other debts that are secured against your property; court fines; council tax; TV licence; gas and electricity; maintenance or child support; tax and national insurance; student loans and hire-purchase agreements.
The money you pay to us will be credited to our client account, which is a separate account specially set up to deal with client money. This money is separate to our business account and cannot be used for any other purpose.
Creditors don’t have to freeze interest and charges and if they didn’t but you still reduced your payments then it would take you longer to repay the debt and cost more over the term. That’s where we come in as we use our experience and “know how” to negotiate with them and do all we can to seek agreement.
Creditors can continue with any action they have already started or threatened to take. Where they do take action this can result in default notices and costs being added to your account or court action. We will be working hard negotiating with them and aim to get them to stop any planned action thus avoiding costs and worry for you.
Well first of all don’t ignore them! Let them know that we are working on your behalf and we’ll be contacting them with details of your plan. Feel free to give them our details and ask them to contact us.
We retain £45 of each monthly payment during the first six months to cover the costs of setting up your plan and negotiating with your creditors. After six months we reduce this fee down to £30 which reflects the commitment you have shown to addressing your debt. If you are paying less than £100 to your plan, these fees will be reduced so you will not pay more than 45% of your monthly payment during the first six months and no more than 30% of your monthly payment from month 7 onwards.
Lenders provide credit reference agencies with information about your repayments on credit agreements and the information is held for 6 years. This is used by other lenders to help make decisions when they receive an application for credit. Your credit file may also be checked by future employers or if you apply for a mobile phone contract, for example. The information includes details of late or missing payments as well as if a lender has issued a default notice. When you take out a debt management plan lenders may enter this information onto your credit file and they may issue a default notice. This means that it may be harder and more costly to obtain credit in the future. Your credit rating may already have been affected by missing or late payments and remember, getting more credit is probably the last thing you should do as it will make your situation more difficult to manage.
You can change your mind within 14 days starting from the day after you sign the terms and you will have nothing to pay. If you’ve already made your first monthly payment it will be refunded to you in full. You can cancel using the contact details below.