Debt Management Plan - FAQs

  1. Isn't debt management the same as debt consolidation?
  2. Will you manage all my debts?
  3. If I join the plan, will it take me longer to pay my debts off?
  4. Why would I need help talking to my creditors?
  5. How much does it cost?
  6. What does the management fee pay for?
  7. How do I know my creditors will accept the arrangements?
  8. If I join the debt management plan, will it damage my credit history?
  9. Is there a debt management trade association?
  10. Will I have to pay if I withdraw from the plan?

1. Isn't debt management the same as debt consolidation?
A. Not at all. It's a repayment plan, which means we provide ongoing help and guidance so you can pay off your debts without a loan. We look at your income and expenditure, helping you figure out what you can afford to pay every month. Then, once we've spoken to your creditors, we do all the administration, handle all letters and phone calls and distribute your payments among them.

Top of page

2. Will you manage all my debts?
A. No. We manage your non-priority debts: your unsecured credit, from credit cards and store cards to overdrafts and personal loans.

We won't deal with your priority debts, such as your rent / mortgage, your utility bills and any loan secured against your home. These are the most important debts, as the consequences of not paying them can be so severe. It's essential you keep making these payments yourself, so we take them into account when we're calculating how much you can put towards your unsecured debts every month.

Top of page

3. If I join the plan, will it take me longer to pay my debts off?
A. Yes. When you join the plan, we ask your creditors to accept lower payments - making your life a lot easier and greatly reducing the risk of incurring charges by missing payments. However, because you're paying your debts back more slowly, it will take longer to put them behind you.

Our plan aims to help people who find it very hard to make their minimum monthly payments. But it's a flexible plan, so if your situation changes we can talk to your creditors about accepting higher or lower payments.

Top of page

4. Why would I need help talking to my creditors?
A. Many people find it hard to talk to creditors when they can't afford to make the minimum payments. Feeling stressed, depressed or embarrassed can make it very difficult to talk calmly about such a serious subject, especially if their relationship with their creditors has broken down in the past.

That's where we come in - we care about your finances, but we're not emotionally involved! Plus, we've spent 15 years talking to creditors and dealing with debt on a daily basis.

Top of page

5. How much does it cost?
A. Every month, you'll send us the amount we've agreed on and we'll take 17.5% of this as our management fee (subject to a minimum of 34.50 and a maximum of 90.00).

But there's a lot we have to do to get your plan started, so the first payment you make will be used as a set-up fee. We need to:

  • Compile your draft plan
  • Appoint your dedicated Personal Finance Manager - your single point of contact
  • Communicate with your creditors, in writing and / or by telephone
  • Prepare your financial statement
  • Calculate and issue your reduced repayment proposals

In other words, your first payment is not paid to your creditors, and this will cause your accounts to go (further) into arrears. We want to make this totally clear before you sign up to anything, as we're committed to being completely open about the way we finance our services.

We'll refund this fee if you tell us you've changed your mind about joining the plan within 14 days of the day you confirm that you've accepted our business terms or (if it's earlier) the day we receive your first monthly payment. Once this 'cooling-off period' is over, you can still withdraw from the debt management plan but you won't receive a refund.

Top of page

6. What does the management fee pay for?
A. It pays for a flexible service which changes along with your financial situation - and for the team of experienced professionals who make it all happen.

The first time you contact us, you'll talk to an Initial Adviser who'll go through your financial situation with you and recommend the debt solution which is best suited to your needs. If that's a debt management plan, they'll introduce you to your Personal Finance Manager (PFM): your single point of contact who answers your queries, keeps you informed and manages your account on a day-to-day basis for as long as you're on the plan. They'll review your case every six months (or whenever you request it) to make sure your payments are always set at the right level. All the way through your plan you'll know exactly where you stand, thanks to your PFM and the detailed payment statements you'll receive every month.

Drawing on their expertise and their close relationships with organisations throughout the credit industry, our Creditor Liaison Department will get you the best possible deal and negotiate new agreements whenever your situation changes.

In short, your fee pays for the peace of mind that comes from knowing that your creditors are receiving regular payments - that your finances are in safe hands.

Top of page

7. How do I know my creditors will accept the arrangements?
A. Like us, creditors know that an affordable payment proposal is in everyone's best interests, and a huge range of creditors trust us to act as a 'go-between' and negotiate agreements that benefit them as well as you.

Creditors are not legally obliged to accept different repayment terms, but with over 15 years of experience behind us, we've built up excellent working relationships with organisations throughout the credit industry - in most cases, we are able to negotiate reduced payments and frozen / reduced interest on our clients debts.

Top of page

8. If I join the debt management plan, will it damage my credit history?
A. If your creditors agree to accept reduced payments and freeze / reduce interest charges, there is always a chance they will issue a default notice, as you've not maintained your original agreement with them. However, if you are currently in financial difficulties, this may already have happened - and it's generally better to accept a default notice than to let debts continue growing until creditors start considering more serious steps such as applying for County Court Judgments or issuing final demands.

Top of page

9. Is there a debt management trade association?

A. Debt management services are provided by Think Money Group company Gregory Pennington who are a founding member of the Debt Managers Standards Association (DEMSA) - the only debt management trade association to achieve Stage One of the Consumer Codes Approval Scheme of the Office of Fair Trading (OFT).

DEMSA was formed to promote good practice and look after the interest of everyone who needs debt management. All members must meet the high standards laid down in DEMSA's own code of conduct. For more information, visit www.demsa.co.uk.

Top of page

10. Will I have to pay if I withdraw from the plan?
A. No. Please inform us in writing two weeks before you leave, giving us time to tell your creditors they should deal with you from now on. But we don't charge you for leaving early - and if you cancel within the initial cooling-off period, we'll refund your initial fee in its entirety.

Get expert debt management adviceIf you would like more information, talk to our team today.

Speak to an expert debt adviser on:0800 195 2911

Apply for help online

Top of page

Conditions Apply. Repaying debt over a longer period may increase the total amount to be repaid. Fees payable when continuing services provided. Your ability to obtain credit will be affected in the short term and might be affected in the medium to long term. Telephone calls may be recorded for training and quality purposes. Calls to 0800 numbers from BT landlines are usually free, calls from other networks may vary and you should check with your network provider for full details of your service.

All About Money Limited © 2013. All rights reserved. 42 Boston Rd, Sleaford, Lincolnshire NG34 7ER.