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Debt Management Plan
Pros and cons of Debt Management
Debt Management: Reduce your monthly payments
- Clear your debts with one affordable monthly payment which is based on what you can afford
- Take control of your debts without another loan and further increasing your indebtedness
- In most cases creditors stop interest and penalty charges whilst you repay your debts
- Repaying debts over a longer period may increase the total amount to be paid
- Your credit rating will be affected for 6 years which may affect your ability to obtain credit in the future
- Debt Management is an informal agreement creditors may still pursue default actions and creditors may not agree to stop interest and charges
About Debt Management
What is a Debt Management Plan?
Debt Management Plan allows you to consolidate all your debts into one monthly payment which is paid to the company who sets up your plan. Your financial situation will be carefully assessed and the money you have left after all your bills, living allowances and rent or mortgage payments are taken into account will be used to pay off your creditors. This money will be distributed to your creditors depending on the amount of debt you hold with them.
Can I pay off my debts early?
Unlike an IVA which is a legally bound agreement you are able to make extra payments into a Debt Management Plan which would enable you to pay your debts off earlier. Debt Management Plans are not legally binding and so if you receive a pay rise, windfall or other source of income this can be used to either increase your payments or pay off some of your debt.
How do you setup a Debt Management Plan?
Immediate Financial will carry out a full financial review with you and will agree an amount that you are able to pay to your creditors. Immediate Financial will negotiate directly with your creditors on your behalf and organise the repayments for you. You just have to make one monthly payment to Immediate Financial and this will then be distributed amongst your creditors (on a pro-rata basis).
What will debt management mean to me?
- You will be able to clear your debts with one monthly payment.
- In most cases creditors will stop interest.
- Penalty charges from creditors should cease as Immediate Financial will be managing the debt for you as long as you keep up your repayments.
- There is no need to take out further credit to pay off your debts.
- Your credit rating will be affected for up to 6 years which could affect your chances of obtaining credit in the future.
- Debt Management is an informal agreement which is made with your creditors and is not legally binding.
- Unlike in an IVA, creditors can still pursue default actions and may not stop interest and changes.
What fees are payable on a debt management plan?
You will pay a fixed monthly fee of £38.50 or 50% of your monthly payment whichever is lower. There are no set up fees on the debt management plan and no penalties for leaving the plan.
What are the debt management fees for?
The monthly debt management fee is for the general day to day administration of your plan, providing you with a dedicated client liaison officer, setting up arrangements with and distributing funds to your creditors, dealing with post and any phone queries from you and your creditors, requesting that interest and charges are frozen by your creditors and providing an annual review of your circumstances.
Need advice? Call free on 0800 230 0379
Number for mobile users: 01483 412 940
Get in touch now for a confidential, no obligations chat with of our advisors and let us find the debt solution that's right for you.
Why debt management?
- Clear your debts without the need for a loan
- Have one affordable monthly payment
- Reduce demands from creditors
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