Frequently Asked Questions

This section will hopefully answer most questions you may have regarding personal debt solutions. If you do not find what you are looking for here, please do not hesitate to Contact Us and we will endeavour to answer any queries you may have.

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• 1) How much will I have to pay into a debt management plan?

  It depends on your circumstances. It's important to keep up with your regular monthly payments, or your creditors may cancel the agreements we have made on your behalf. This is why we will work out an affordable monthly payment, based on your earnings and expenditure.

• 2) How long will the plan last?

  You can use the plan until all the debts have been paid in full or until your circumstances change for the better. Due to the reduced payment levels, this will be longer than the terms of original credit agreements and may incur addition interest payments as the term of the credit agreement is extended.

• 3) How do I know I'm getting the best advice?

  If your circumstances are not best served by a Debt Management plan, we will advise accordingly. As we offer all types of debt solutions we are able to offer impartial advice as to the best course of action.

• 4) How do I know my debts are being paid?

  Once up to date balances from your creditors have been received, your monthly payments between them are pre-portioned based on how much each is owed. A statement showing how much each creditor will receive will be issued. This remains fixed unless your circumstances change. In addition to this, you will still receive statements from your creditors.

• 5) Will this affect my credit rating?

  When entering into a debt management agreement, you will be breaking the terms of your initial repayment agreements with your lenders. This may have an adverse effect on your credit record. Due to time required arranging and distributing payments to creditors and delays in making first payment into the programme from clients, contractual payments to creditors may be missed.

• 6) Will my creditors/lenders definitely accept your proposed debt management plan?

  Creditors and lenders do not have to accept our proposals, but most are willing to accept them if we can prove it is beneficial and agreeable to both parties. Please note that there is no guarantee that existing or threatened proceedings will be suspended or withdrawn. Your creditors may also continue to issue default notices and add additional costs to your debt. Please be assured that we will do all we can to ensure your creditors understand the difficulties you are in, to ensure the best possible outcome.

• 7) Is this a loan?

  No. We neither lend you money nor pay off your debts. Your payment plan is a solution that allows you to repay your creditors at a monthly rate that you can afford. If you do not make payments into the plan, we cannot make payments to your creditors.

• 8) Will I be credit checked before acceptance?

  No. Since we do not lend you any money, we do not need to credit check you.

• 9) Can I come on plan if I already have CCJs against me?

  Yes. 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 talk to us before coming on plan.

• 10) Does it make a difference if I am a homeowner or tenant?

  No. It makes no difference whether you are a tenant or homeowner or even if you are still living with your parents.

• 11) Do I have to be in full time employment?

  No. To be accepted onto debt management, you only need to have a surplus of income above what you need to live on.

• 12) Do I have to tell my partner?

  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 the plan.

• 13) Will you be dealing with every company I owe money to?

  No. Some of your debts may be regarded as priority debts due to serious consequences if payments are not made. An example is your mortgage or utility bills. These will be taken into consideration when calculating what amount is available to distribute to your other lenders and it is very important that you continue to pay these in full yourself.

• 14) 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.

• 15) Do creditors always accept reduced payment offers?

  Creditors do not have to accept any offer of repayment below the contracted minimum. However it is our experience that they are prepared to accept reduced repayment offers where we are able to demonstrate that the offer is reasonable and that you are committed to repay your debts by use of our debt management service.

• 16) Will the plan affect my credit rating?

  Because coming on plan will result in your not making contracted repayments on your unsecured debts, you should expect that your credit rating will be adversely affected. However, your credit rating may already be poor if you have arrears or a history of missed or late payments.

• 17) Will I receive a Default Notice?

  By coming on plan with us, you will be in default on your original credit agreement and your creditor is therefore entitled to send you a Default Notice. Creditors send out Default Notices to protect their own legal position.

• 18) Will the plan prevent my creditors taking further recovery action?

  We cannot guarantee that your creditors will not take further action, including court action to recover debts from you but, if they do, we will help you respond so that any repayment that is required is within your ability to repay.

• 19) What if my creditors continue to pursue me for payments?

  Certainly in the short term, your creditors will continue to take action to recover your debts. Do not ignore them. Deal with calls politely, informing creditors that you have appointed ourselves to act on your behalf. You should forward any letters to us to deal with on your behalf.

• 20) How long will the plan take?

  Because you are making reduced payments on your debts, it will take longer for your debts to be paid off. As part of our initial consultation with you, we will provide you with an estimate of the likely time you will be on plan. Please understand that a debt management plan is not an overnight solution.

• 21) What if my circumstances change?

  Because a Debt Management Plan is an informal arrangement, it is easy to change it as your personal circumstances change, and even to replace it with an alternative arrangement if that becomes more appropriate at a later date.

• 22) My bank says they will not deal with you and will take me to court if I use you. What do I do?

  A creditor cannot refuse payments from a debt management company and then take you to court for non-payment. Some credit companies may prefer not to deal with us so they can apply more pressure to you, however you have a legal right to have anyone you wish deal with your finances.

• 23) My bank says you have not written to them, but you say you have. Why?

  Employees of a creditor's collections unit have one job, to try to get you to pay money. Unfortunately, some will do this any way they can. Once they acknowledge we are dealing with the account, they know they have to negotiate through us. If they tell you they have not heard from us then they have more leverage. If they make you think we are not doing our job properly, they will convince you to cancel the agreement with us, and then they can use any tactics they like to get the money from you.

  If this happens inform them that we are dealing with your affairs, contact us immediately and we will then issue a further copy of correspondence to them.

• 24) My bank has said they are going to send a bailiff round to collect their money, can they do this?

  No. A bailiff can only be instructed and sent by a County Court or Sheriffs office, this means a bailiff can only call if you default on a court order. A debt collector may try to trick you by saying, “if you don’t pay this bill, we could send a bailiff round” this is not true unless you’ve defaulted on an earlier court order.

• 25) Can I keep one of my credit cards just for emergencies and not count this debt or credit card as part of a debt consolidation programme?

  No. If any of your other creditors find out that you are treating another company better than them, they will reject any offers made to them and probably look to collect money through court action. All creditors have to be treated equally.

• 26) Will I be charged if I change my mind?

  We will provide you with a 7 day “cooling off” period from the date you accept our Terms and Conditions for Debt Management or, if earlier, from the date your first payment is received. If you decide not to continue with the plan within the first 7 days, we will refund your initial fee.

• 27) What do you charge for this service?

  So that we can initially set up your programme and negotiate with your creditors, your first monthly payment covers our implementation costs. After that, our ongoing administration charge is 15%. This is included in your monthly payments - not added on.

• 28) How are the fees collected?

  Every time we make a distribution to your creditors on your behalf, we deduct our fee for that distribution. If we do not make a distribution, we do not take our fee.

• 29) Can I cancel my plan at any time?

  Yes. All you have to do is give us 4 weeks written notice of cancellation.

• 30) Do I incur any charges if I cancel my plan?

  No, you can cancel with us at any time without any further charge subject to the correct notice period.

• 31) How is my money held until it is distributed to my creditors?

  We hold all monies sent to us for distribution to creditors in a dedicated client account with our bankers. This means that your money is completely protected in the event of our insolvency.

• 32) Do I get interest on my payment that I make to you?

  Because your payment is only held for a maximum of 8 days before being distributed to your credit companies no interest is paid.

• 33) Can a creditor take further recovery action before the IVA is approved?

  Yes, but you can apply to the courts for an Interim Order to stop any of your creditors taking further recovery action until the outcome of your creditors meeting is known.

• 34) Can an individual creditor refuse to accept an IVA?

  The decision to accept or reject an IVA is made by a vote of your creditors at a creditors meeting. You need to get 75% acceptance by debt value at that meeting for the IVA to go ahead. If less than 75% by debt value vote to accept the IVA, the IVA will fail. Once the IVA has been accepted by vote at the creditors meeting, all creditors are bound by law to accept the arrangement.

• 35) Can I cancel the IVA once it is set up?

  First, you'll need to discuss the situation with your insolvency practitioner. Because an IVA is a formal legal agreement, once it is set up, you cannot just cancel it if you change your mind. Failure of an IVA can lead to bankruptcy.

• 36) Do creditors have to accept an IVA?

  The decision to accept or reject an IVA is made by a vote of your creditors at a creditors meeting. You need to get 75% acceptance by debt value at that meeting for the IVA to go ahead. If less than 75% by debt value vote to accept the IVA, the IVA will fail.

• 37) Do I have to be in full time employment?

  No. You only need to have a surplus of income above what you need to live on to enter into and Individual Voluntary Arrangement (IVA).

• 38) Do I have to tell my partner about the IVA?

  Yes. You will almost certainly have to tell your partner if you are entering into an IVA.

• 39) Does it make a difference to the success of an IVA if I am a homeowner or tenant?

  No. It makes no difference whether you are a tenant or homeowner or even if you are still living with your parents.

• 40) How long does it take to set up an IVA?

  Providing everything is standard, it takes typically between 6 and 8 weeks to set up an IVA, however sometimes this can take longer depending on circumstances.

• 41) How long will the IVA last?

  This is variable, but it usually lasts for up to 5 years.

• 42) If I already have CCJs against me can I enter an IVA?

  Yes. You can avoid further recovery action on your unsecured debts when you enter into an Individual Voluntary Arrangement (IVA) even after a creditor has obtained a CCJ against you.

• 43) If I am a homeowner, will I have to release equity in my home into the IVA?

  You may have to release a proportion of any available equity in any property you own as part of your overall contribution to your creditors. This will usually happen after the 4th year of the IVA, and will be dependant on your personal circumstances.

• 44) What happens if I just stop paying into the IVA?

  If you fail to keep to the arrangement, your Insolvency Practitioner has the right to apply for you to be declared bankrupt and your creditors may petition for your bankruptcy.

• 45) What happens if my circumstances change?

  If you are unable to maintain repayments because of changed circumstances, your supervisor in the IVA can request a variation to reflect your new circumstances.

• 46) What happens if the IVA is not approved?

  You will have to come to an alternative arrangement with you creditors to repay your debts. We may be able to offer you an alternative solution.

• 47) When I get an IVA will creditors be able to take further recovery action?

  No. Once the IVA is in place, you are protected from all further recovery action by your unsecured creditors providing you abide to the terms of the arrangement.

• 48) Will an IVA cover all of my debts?

  No. An IVA can only cover your unsecured debts and arrears, some debt such as Student loans are not covered.

• 49) Will I be credit checked before acceptance?

  No. You will not be borrowing any money, so there is no need for a credit search.

• 50) Will the IVA affect my credit rating?

  As with any form of debt management, you should expect that your credit rating will be adversely affected by going into an IVA. An IVA agreement is a formal legal agreement and will affect your credit rating for up to 72 months after completion.

Not sure which solution is right for you?

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