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No not always, but when you make a reduced offer of payment to your creditors they are obliged to take into account your current circumstances and your priority debts (mortgage or rent, Council Tax, utility bills) when deciding what to do. They are required under their own Codes of Conduct to treat you fairly so as long as your repayment offer is reasonable and fair you stand a very good chance of having the offer accepted and interest or charges stopped.
Once you give us your authority to act we will inform your creditors that we are working on your behalf. At that point many of them will start to communicate directly with us, taking a lot of pressure off you. Under their own codes of conduct, creditors are required to give you at least 30 days grace in order to get the Debt Management Plan approved and set up.
By offering reduced repayments you will be in default on your original credit agreement and your creditor is therefore entitled to send you a Default Notice, if they haven’t already done so. Most creditors will do this to protect their own legal position.
Because taking out a plan will result in you not making the contractual repayments on your unsecured debts, you should expect that your credit rating will be adversely affected in the short to medium term. However, your credit rating may already be poor if you have arrears or a history of missed or late payments.
The amount you pay each month is based solely on what you can realistically afford. When you contract us, one of our Senior Financial Consultants will work through your current financial situation with you to identify what you can realistically pay each month towards your debts.
We use approved guidelines to calculate what you need in order to pay your household bills and other living expenses – this way we are able to demonstrate to your creditors that what you are offering to pay is genuinely all you can afford.
As long as your creditors see that your payment offer is reasonable - and we'll deal with all the negotiations for you - there's a good chance they'll accept lower payments. Whilst there is no guarantee, we’ll also seek their acceptance to stop charging interest or fees on your debts, which means that your debt burden won’t grow.
The management fee pays for all the work we do dealing with your creditors on your behalf. You have the convenience of making a single monthly payment to us and we do the rest.
We’ll review your case every six months (or whenever you request it) to make sure your payments are always set at the right level and throughout your plan we’ll ensure that you know exactly where you stand.
We’ll spend time supporting you to make the most of your financial situation, by helping you get the best deals on your utility bills, insurance and banking, and by making sure that you are claiming all the benefits and tax credits you are entitled to.
In short, your fees pays for the peace of mind that comes from knowing that your creditors are receiving regular payments and that your financial situation is being well managed.
Yes you can. You can even use the plan to make payments against any existing CCJs that you have. Just make sure that we know exactly what your current situation is when you first talk to one of our Senior Financial Consultants.
Yes, you can use a Debt Management Plan whatever your residential status. Because mortgage payments and rent are treated as priority debts, by entering a Debt Management Plan you are able to ring-fence sufficient money to ensure these are always paid on time.
No, it can only cover your unsecured debts and arrears. Priority must be given to other types of debts (called Priority Debts) due to the serious consequences of not keeping up these payments. Some examples of priority debts are: rent; mortgage payments; hire purchase agreements; secured loans; council tax; and utilities such as gas, electricity and water.
When assessing your financial situation, we make suitable allowances for you to be able to afford your priority debts and your day-to-day living costs before we calculate how much you can afford to pay towards your other creditors.
Priority Debts are the most important debts you have and the ones which, if you don’t make sufficient payments, could have severe consequences.
Some examples of priority debts are: rent; mortgage payments; hire purchase agreements; secured loans; council tax; and utilities such as gas, electricity and water.
When assessing your financial situation, we make suitable allowances for you to be able to pay your priority debts and your day-to-day living costs before we calculate how much you can afford to pay towards your other debts (such as unsecured loans and credit cards)
Not necessarily, though you will normally need to have at least £100 available each month to pay towards your debts. Benefits and Tax Credits can be included in this calculation.
If the debts are all in your name then you don’t need to tell your partner. However we would always recommend that you are honest with them. It may be that you will need your partner’s income to be taken into account to support your Debt Management Plan.
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