Debt Management FAQ's
Below are questions that we get frequently asked by our users.
What is a debt management plan?
It is an agreement drawn up between you, a debt management company and your creditors; it allows you to change your current repayments into manageable repayments that are supervised by the debt management company. This kind of agreement is done for people that have who have issues keeping up repayments. You will not have to sell your property as part of the agreement and interest charges are not normally stopped.
Is a debt management agreement a loan?
It is not a loan, you still keep up your repayments, and we request that the repayments are changed to a more manageable amount that you can keep too.
Will I still be contacted by my creditors?
You will still receive contact from your creditors, phone calls and letters, the agreement is informal and not legally binding, but the contact will become less frequent as your plan continues as they will be receiving regular payments.
Can I pay more or less if I want to change payments?
As the agreement is informal you suit the payments to your circumstances, if these change then you can raise or lower your payments.
Should I cancel my direct debits?
Yes you should, but only to your creditors the agreement is set up with(you don’t want to be paying them twice!) But you will still need to pay any direct debits not included in the agreement – car insurance, water rates, council tax etc….
How will I know my debts are being paid?
You will still receive your statements from your creditors showing the balance on the outstanding debt.
Will a debt management agreement affect my credit rating?
Yes it will have an affect, initially it could have an adverse effect as you will not be paying your contracted payments, but over time it will have a positive effect on your credit rating, as you will be making regular payments through your plan.
Should I tell my partner?
DeleteDebt believe that honesty is the best policy, particularly with financial situations and loved ones. But you only have to inform your partner if you have shared debts, also your partners income could be taken account for in an agreement plan.
Does a management plan cover all of my debts?
It will only cover unsecured debts and arrears.
Could creditors refuse to accept payments under a debt management agreement?
It is a principle of law that creditors must accept all offers of payment you make to them.
How long does the plan last?
This depends on what you owe, your current financial circumstance and what you can realistically afford to pay. We will give you a idea of the length of a plan when you contact us. You must bear in mind that nothing is set until the plan is agreed by your creditors; they may or may not agree to freezing you interest.