Debt Management
Get out of debt and keep your home with an IVA.
A Debt Management Plan, is an informal arrangement between you and your creditors to repay your debts at a reduced monthly rate over a longer period of time.
A Debt Management Plan may be right for you if you have unsecured debts that you can’t afford to repay. To enter into a Debt Management Plan, you would need to have a surplus income after living costs and household bills have been paid.
If you enter into a Debt Management Plan, you creditors are not obliged to freeze interest and charges, although they may do you if you can demonstrate that you are serious about repaying your debt. Furthermore, as a Debt Management Plan is not legally binding, your creditors are still entitled to call and write to you chasing repayment of the debt. Arranging a Debt Management Plan through a reputable Debt Management Company can help reduce the number of letters you receive.
You can set up a Debt Management Plan yourself, but you will have to negotiate with each of your creditors directly. Debt Management Companies often carry more weight in negotiations with creditors and having a single point of contact can make dealing with your debt much less stressful.
Obtaining additional credit while you are in a Debt Management Plan is ill-advised. Entering into a credit agreement knowing you are unable to repay it could be considered fraudulent. A properly budgeted Debt Management Plan will ensure you have sufficient money to live on, so further credit should not be necessary.
If you enter a Debt Management Plan, your creditors may issue a Default Notice as you will be defaulting on your original credit agreement. This does not mean that they will automatically take legal action as the Debt Management Plan shows intent to repay. Also, your creditors are still able to apply for a County Court Judgement , although if you maintain the agreed payments into the Debt Management Plan, the likelihood of this happening is reduced. Any Default Notices or County Court Judgements will remain on your credit reference file for 6 years from the date of issue.
Debt Lifeboat don’t provide or arrange Debt Management Plans, but if you call us, one of our experienced specialists will talk you through all of the available options. If a Debt Management Plan is the right option, we can refer you to one of our strategic partners who specialise in Debt Management Plans.
For more information, call us on 0800 917 3328 and speak to one of our experienced advisors.
