Posts Tagged ‘ Debt Management Plans ’
As someone who is in debt and struggling to meet the repayments, you will probably want to speak to someone who can provide you with practical and impartial advice. Doing a simple search online can provide you with dozens of options who offer this service, but beware of companies that do this but charge you fees.
There is an old saying “the best things in life are free” and this applies to debt advice as companies like Payplan and charities like Citizens Advice Bureau and National Debtline , who provide the very best in debt advice and debt solutions to you for free. However, there are some companies that feel they need to charge a fee to their clients for the same service that we at Payplan will do for free.
A reputable fee charging Debt Management Company will advise you of the fees that they charge from the beginning; however, some companies may not be that clear about their fees. It is therefore extremely important that when you are searching for debt advice, you follow these simple steps:
- Do your research – use online review sites such as Review Centre or Trust Pilot to see what other clients of your chosen company have to say about their service.
- Speak to several companies – find three companies and speak to them all and see what solutions they recommend and whether you like them. Speaking to several companies will allow you to get several different options.
- Ask questions – when speaking to your chosen company, ask as many questions as you feel you need answering and make sure you fully understand the entire process, especially their fee structure.
Finding the right solution may seem like a daunting task, but getting advice from the right company will take a huge weight off your shoulders and give you the assistance that you need.
Ask Payplan… What are the alternatives to a debt management plan?
A debt management plan, or a DMP, is only one solution available if you are struggling to maintain payments to your creditors. At Payplan we understand that a DMP may not be suitable for everyone and we therefore provide all of our clients with a range of solutions that may be suitable for them.
Alternative debt solutions include:
- Individual Voluntary Arrangement, IVA – is a legally binding agreement between you and your creditors.
- Bankruptcy – is a form of insolvency where you will be discharged from all of your unsecured debt.
- Debt Relief Order – is another form of insolvency, this too will write off all of your unsecured debt. A DRO is designed for people with low levels of debt and little or no assets.
- Self Help Pack – this is designed for people who do not have enough surplus or a high enough debt level to enter into a DMP or IVA. They are designed to help you set up your own arrangement with your creditors.
The solutions listed above may not be available at all Debt Management Companies.
For many of you that are in debt, you may find yourself managing your finances on a tight-rope, with one small change in circumstances having a dramatic knock-on effect. When the change is big, the sustainability of your carefully constructed budget and well managed plan becomes jeopardised, causing a lot of stress and anxiety.
A change in circumstances can happen to anyone at any time – it could be due to redundancy, addition to the family or loss of overtime. Whatever the reason may be, there is no need to panic.
“I am in a Debt Management Plan, what do I do?”
If you are currently repaying your debts through a DMP, it is important to keep us informed of any changes in circumstances as and when they occur. By doing this, your case officer can do the following to assist you:
- Create a new income and expenditure, look at areas in which you can either make cut backs or they can help by prompting you to look for any benefits that you could receive.
- Agree a new payment amount, where necessary, and inform all of our creditors of the new amount.
“I am in an Individual Voluntary Arrangement, what do I do?”
If you are repaying your debts through an IVA it is extremely important to notify your case officer before you miss any payments, as an IVA is a legally binding arrangement between your creditors and you. Failing to adhere to the terms and conditions of your IVA proposals could result in your IVA failing.
Your IVA case officer will be able to reassess your income and expenditure with you, as well as being able to propose a temporary payment break or a new payment amount via a Variation Meeting with your creditors, which they would need to approve. However, please note, payment breaks and amending payments differs for each client and you will need to check the terms of your arrangement before this can be proposed.
For more information on this subject, then please speak to your case officer.
Bankruptcy is a form of insolvency and it is often referred to as a ‘last resort’ because of the long term affect it can have. Looking for a suitable solution for your debts can be a daunting experience and many people who contact us have a lot of questions. Below are five of the most common questions we are asked.
How long will I be bankrupt for?
Most people are automatically discharged from bankruptcy after one year. In some cases the Official Receiver will postpone the discharge due to on-going enquiries, for example where the debtor has not cooperated with them.
What will happen to my home?
If there is equity in your property then the Official Receiver will look to release it. They will do this in one of three ways:
- Asking you to see if your family/friends can raise the equity amounts.
- Asking you to place your home on the market in order to sell.
- Obtaining an order for possession of sale.
If I go bankrupt how will it affect my partner?
As long as you do not have any joint debts your partner will not be affected. However if you have joint unsecured debts the creditors will chase your partner for the full amount outstanding as you are both joint and severally liable.
How does bankruptcy affect my credit rating?
The bankruptcy details will remain on your credit file for six years from the day the petition is granted by the court. This could result in you struggling to obtain any type of credit during this time; lenders generally check your credit report to help them decide whether or not to lend to you. You will also have a restriction placed on how much credit you can apply for during the Bankruptcy.
What debts are included in bankruptcy?
Your bankruptcy will deal with all of your unsecured debts, such as:
- Bank loans
- Payday loans
- Credit cards/Storecards
Any other type of debt would need to be dealt with outside your bankruptcy.