Debt Management FAQs
- How does debt management affect my credit rating?
- If you already have a debt problem, it is likely that your credit rating has already been affected. If you are unable to meet the original contracted terms of your credit agreement your creditors will register that you are in default. This will be recorded on your credit file and will normally be retained on your file for 6 years.
- What happens initially when I contact you?
- Once you have completed the online contact form, an adviser will contact you and talk to you about your situation and answer any queries that you may have about the Debt Management service and to arrange with you a convenient time for us to call you to go through your financial details. The time can be arranged whenever it is convenient for you, including weekends or in the evenings if you are unable to do this during the day. The call usually takes no more than 30 minutes and you will be under no obligation to go further should you choose not to.
- How much will my creditors get each month?
- This will depend on how much disposable income you have (i.e. the money left over after paying all your living expenses) and how much is owed to each creditor.
- My reduced payments are less than my interest charges, does this mean I'll be paying forever?
- Many lenders will freeze interest charges when dealing with fee-free debt managers. This they do this because they can see that you are making a genuine effort to pay your debts and are doing so with the assistance of a professional organisation.
- How long does the Plan last?
- That will be determined by how much is owed and the amount you can realistically afford to pay your creditors each month. You?ll be given an indication of the likely length of the plan at the outset, but it will always be dependent on your creditors freezing interest and other charges on your accounts and your circumstances not changing.
- How do I know I'll be able to maintain the reduced monthly payments?
- Any repayment proposal is agreed between you and your debt manager in advance. It is based on the information you have supplied and takes into account all your finances. That is why it is imperative that you include all the information asked for.
- What happens if my circumstances change?
- If this should happen whilst the plan is in place, please let us know immediately. Depending on your situation a revised repayment plan will be negotiated with your creditors. As a matter of course, we will annually review your plan with you and amend your monthly payment if necessary.
Debt Consolidation FAQs
- How much can I reduce my monthly payments by?
- This will depend on how much you are paying at the moment and how long you want to take to repay the loan. But reductions in monthly payments can be as much as 75%.
- How much can I borrow?
- There are a variety of factors which dictate how much you can borrow. Whilst your income and, for secured loans, the equity available in your property are key, the main one is that you can afford to make the monthly repayments. We can arrange loans from £3,000 up to £1 million.
- Over what length of time can I spread my repayments?
- This is entirely up to you and will depend on how much you can afford each month. Our loans are usually available over 3 to 25 years, though some mortgages can be spread over 47 years.
- Can I use the loan for more than debt consolidation?
- Certainly. Consolidating your existing credit allows you to free up money for other things. You can borrow extra for that new car, boat or caravan, to pay for your dream holiday or so you can have the new windows or conservatory put in. The choice is yours, as long as you do not over-borrow.
- What if I have an accident, am ill or get made redundant?
- We can arrange optional accident, sickness and unemployment cover if you want the added peace of mind this brings. Life assurance is also available.
- Can I move house if I want?
- Absolutely. If your consolidation loan is secured against your house then you can use the proceeds of the sale to pay the outstanding balance of the loan or, where you are moving to another property, you may be able to transfer it to your new home. Either way, contact us and we'll help you decide on the route which is most suitable for you.
Individual Voluntary Arrangement (IVA) FAQs
- Who can be helped?
- Because of the costs of setting up an IVA, it is only practical to obtain one if your debts exceed £15,000 or so.
- Will I lose my house?
- No. But should you have equity in your house, savings or other assets then these will be taken into account when making an offer to creditors.
- Can I stay in business?
- Yes, you can. Unlike being declared bankrupt, there's no limit on your business activities.
- How long does an IVA last?
- They normally last five years.
- Which creditors can be included in an IVA?
- Creditors you can include are: Banks, Finance Companies, Credit, store and charge card companies, Customs and Excise (VAT), Inland Revenue and even loans from friends and family. You can't include your mortgage, hire purchase, fines, debts incurred through fraud, maintenance/child support arrears or rental property.
- Can I enter into an IVA if I have already received a Statutory Demand?
- Yes.
- Can I obtain an IVA if a Bankruptcy Order has been made against me?
- Yes.
- What happens if I don't keep up the payments on my IVA?
- If you default on your payments, the supervisor of an IVA can initiate bankruptcy proceedings against you.
- What happens once I finish paying my IVA?
- At the end of the process the Insolvency Practitioner will issue you with a 'Statement of Completion', typically within 3 months of the final payment. The Insolvency Practitioner will also send a copy of this to the Insolvency Service so that they can amend their records. So there is no need for you to attend court or even visit the Insolvency Practitioner's offices. However, the onus is on you to send a copy of the Statement of Completion to all the credit reference agencies which are in operation at the time of their completion.