Debt Management Questions

Question: What is debt management?

Answer: Debt management is the process by which your debts are consolidated in to one monthly payment. This one payment is an amount, which you can afford. This amount is then apportioned amongst your creditors and, on your behalf, payment is negotiated and agreed at this level. The amount by which all your unsecured creditors are paid is known as equitable distribution.

Question: How will this help me?

Answer: We will set up a debt management plan for you, and negotiate and administer your monthly payments to each of your creditors. This means that you will only have to make one monthly payment to Wellbeing Services and all your outstanding debts will be repaid from that payment. For you this means that you will have the reassurance that nobody will be chasing you for payment of your arrears, and that the arrangements for repayment of your debts are paid on time. It is quite possible that, at this time your outgoings are more than you can afford, or even in excess of your income, this can be rectified. Your one monthly payment will be an amount, which is affordable. Also, it is possible that we will be able to get interest on your debts frozen. This cannot be guaranteed but we are able to achieve this in the majority of cases. Obviously this greatly reduces the burden of debt, and results in the debt being cleared in a shorter period of time.

Question: How do I workout how much I could afford to pay my creditors on a monthly basis?

Answer: We assist you with this. Together we will complete an information pack. The information pack is compiled in such a way as to come up with an affordable monthly figure.

Question: What do you charge, and how do I pay for your service?

Answer: You may well be thinking “If I can’t afford to pay my debts, then I can’t afford to pay anybody to sort them out for me.” The answer is that you can. Your first payment allows us to set up your account and commence the debt management plan process. Our fee for ongoing administration simply becomes part of the amount you pay each month. Costs vary dependant upon how many creditors you have but it will never exceed 15% of your monthly payment to us. We can inform you of the cost once we have assessed your situation.

Question: How much will my creditors be paid?

Answer: This depends on two things! The amount you are able to pay in total on a monthly basis, and the outstanding balance you have with each creditor. We are only able to make this calculation when we have all the necessary information. We will obtain the balances from your creditors. At this point you will be sent a statement showing all outstanding balances and payments. It may be at this stage that you owe more than £15,000. If this is the case then we can discuss alternative arrangements with you such as an IVA.

Question: How long will the debt management plan last for?

Answer: This depends on how much you can afford to pay on a monthly basis and how much you owe in total. This is easy to calculate (assuming that all creditors agree to freeze interest). You simply divide your total debt by your monthly payment to your creditors. This will give you how many monthly payments you will need to make. You would also need to take in to account the possibility of being able to make increased payments in the future, as this will obviously reduce the repayment period. If having done this you feel that the debt management plan is likely to be in excess of five years we will be happy to discuss alternative solutions with you.

Question: Will my employer get to Know?

Answer: No. There is no reason for us to inform anyone of our arrangement, and it is thus treated in the strictest of confidence.

Question: What should I do if one of my creditors contacts me?

Answer: If you are contacted by one of your creditors, we will deal with this for you. If you are contacted by means of a letter, forward the letter to us by post or fax (01482 893259). If you are contacted by means of a telephone call, ask the caller to contact us on (01482 893258).

Question: If I have spare money one month, can I pay more?

Answer: Once your debt management plan is set up, you should maintain the same payments. If you find yourself able to pay more on a regular basis, we can arrange this but we are not able to make a single increased payment unless this is known about at the outset or the single payment is sufficient to pay off a large proportion of your debt.

Question: If I take a drop in income and cannot afford the monthly payments does that mean that the debt management plan will fail.

Answer: No. We could reschedule payments to fit your change in circumstances.

Question: If I agree to a debt management plan am I obliged to adhere to it?

Answer: No. You are under no obligation at all. However, it should be noted that should your payment arrangement be terminated, you would become liable again for the full outstanding balance of all your debts. Therefore it is obviously to your advantage to stay with the arrangement until your debts are cleared, and this is what most people do. If for whatever reason you should wish to terminate the arrangement, you are free to do so.

Question: What happens when I have completed the debt management plan?

Answer: Your liability is discharged in full.

For Debt Management Programmes, we recommend Wellbeing Sevices who have have ten years experience of reducing your outgoings by as much as 90%. As a well-established and professional financial management company, Debt Ready will approach your creditors for you and negotiate with them to find a comfortable payment for you. To see if you qualify for this service, click here or call them on 0845 466 7152