How to choose the right debt management company
- Does the company have recognised quality marks?
- Are they a member of the Debt Managers Standards Association (DEMSA)?
- Do they operate under the government’s debt management Protocol?
- Are the terms and conditions available to download?
- Are they regulated and authorised by the Financial Conduct Authority?
- Do they promise NOT to sell your details to 3rd parties?
- Are they properly qualified to give you the best advice?
- Their debt advisors DO NOT RECEIVE ANY COMMISSION?
What are the benefits of debt management?
- Reduce what you pay each month to an affordable amount
- Make one single payment on a date you choose
- Ease the stress of dealing with your creditors
- Respond quickly to changes in your circumstances
- Send you regular statements showing how your debts are reducing
Typical Debt Management Plan Example
- Credit Card Balance £2,500
- Store Card Balance £1,620
- Personal Loan Balance £4,900
- Overdraft balance £500
- Total Debt £9,520
Currently Paying £610 per month
Paying £195 via your Debt Management Plan including fee of £30
Reduction in outgoings £415 per month
Can you guarantee Interest and Charges will be stopped?
Most creditors will freeze interest and charges BUT this cannot be guaranteed. Creditors are more willing to deal with a debt management company which operates under the government Protocol than one that does not.
How long will my plan last?
This all depends on how much you can afford to pay, but if you are paying a reduced amount to creditors it may take longer to repay your debts.
How will it affect my credit rating?
Unless you make full contractual payments to a creditor your credit rating will become impaired and mainstream creditors will be unlikely to lend you more money. In reality borrowing more money is not the right answer and so you should talk to us about the right solution for your circumstances.
How do I know if debt management is right for me?
The best way to find out is to talk to one of our advisors – they will explain all the options to you, and work with you to find the best solution to your problem.
What is the debt management “Protocol”?
The Government wanted to ensure that debt management companies operated to a high standard and quality of service, as a result the “Protocol” was introduced as a voluntary code. To be approved as complying with the Protocol, a company must undergo a rigorous audit and when a company is accepted as Protocol compliant, they are allowed to display the logo. It doesn’t stop there and regular checks are undertaken to confirm we are operating to the high standards expected. There are only a small proportion of debt management companies who have demonstrated they’ve reached the standards required.
What are the fees in debt management?
For all debt management plans set up after 6th April 2016 there is no charge for setting up the plan. To cover the cost of administering your plan there is a monthly management fee which is based on how much you pay but has a minimum of £30 per month. To see full Terms and Conditions- please click here.
Can I get a debt management plan without paying fees?
There are a number of places you can find free debt management:
Here’s a list of organisations and how to contact them for free debt management advice:
- The Money Advice Service (Ask “Ma”) will provide free debt management services – https://www.moneyadviceservice.org.uk/en/tools/debt-advice-locator
- Citizens Advice have offices nationwide where you can call in and discuss your financial problems. To find your nearest office call 0808 808 4000.
- Step Change (formerly Consumer Credit Counselling Service (CCCS) offers a nationwide phone service from offices in Leeds – call 0845 345 4345
- National Debtline is another telephone advice service. Click here for the National Debtline web site or call – 0800 138 1111
- Payplan gives similar debt advice to the services listed above Call – 0800 197 6026
- The Insolvency Service – In Debt Dealing with my Creditors http://www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/documents/digitalasset/dg_179015.pdf
- Community Legal Advice (CLA) is for anyone qualifying for legal aid in England or Wales. call – 0800 280 2816