Debt Management FAQs
Here you’ll find the answers to the most frequently asked Debt Management Plan questions. If you can’t find the answer to your query here, please don’t hesitate to call us.
No, you can cancel with us at any time without any further charge.
We will refund any monies you have paid that have not yet been distributed to your lenders at the time of cancelling.
It’s easy to talk to our Debt Solutions advice team, call us on the number at the top of the screen. Alternatively, complete the enquiry form to the right of the page and we’ll get back to you.
Lenders must treat you fairly; therefore when you make a reduced offer of payment, your lenders have to take your circumstances into account when deciding what to do. With experience spanning more than a decade and excellent relationships with over 3,500 UK lenders and financial institutions, you can rest assured that we will strive to negotiate the best repayment rate on your behalf.
In the initial stages of the Debt Management Plan process, you will probably continue to receive letters and phone calls from your lenders. This happens because it takes a short time to negotiate with your lenders and they will continue with their standard collection activities until a new repayment amount is agreed. This is normal and nothing to worry about.
As soon as we have received your signed Client Information Form, you can tell your lenders to contact us. We will then deal with all letters and phone calls from your lenders. Please note that we cannot guarantee that lenders will permanently cease to contact you – they are still entitled to do so. Do not ignore them, ask them to contact us.
Once your lenders know that we are dealing with your debts on your behalf, many of them will start communicating with us directly. Rest assured we will keep you informed about any correspondence we have with your lenders.
We cannot guarantee that your lenders will not take further action, including court action to recover debts from you. If they do take such action, please be assured that we will help you respond so that any repayment that is required is within your ability to repay.
By coming on Plan with us, you will be in default on your original credit agreement and your lender is therefore entitled to send you a Default Notice. Creditors send out Default Notices to protect their own legal position.
Because taking out a Plan will result in you not making the contractual repayments on your unsecured debts, you should expect that your credit rating will be adversely affected in the medium to long term. However, your credit rating may have already been affected if you have missed or made late payments.
Yes. You can even use the plan to make payments against any existing CCJs that you have. Just make sure that we know exactly what your current situation is before commencing with a Debt Management Plan.
Yes. It makes no difference whether you are a tenant, homeowner or still living with your parents.
No. To come on Plan, you only need to have a surplus of income above what you need to live on. We will ask for proof of income.
It is advisable that you tell your partner – especially if your partner’s income has to be taken into account to support the Plan.
No. A debt repayment plan can only cover your unsecured debts and arrears.
Priority must be given to other types of debts because of the serious consequences of not maintaining regular payments. You must continue to make these payments yourself. Some examples include rent or mortgage, hire purchase agreements, any loan secured against a property, council tax and utilities such as gas, electricity and water.
When assessing your financial situation, we make suitable allowances for you to be able to afford your priority bills and day-to-day living costs before we calculate how much you can afford to pay towards your unsecured debts.
No, a Debt Management Plan is not a loan. We neither lend you money, nor pay off your debts. Your payment plan is a solution that allows you to repay your lenders at a monthly rate you can afford. If you do not make payments into the plan, we cannot make payments to your creditors.
A secured debt is a debt secured against a property or asset that you own. Typical secured debts will be a mortgage, hire purchase loans, personal loans, etc. An unsecured debt is any debt not secured against a property or asset, such as a bank overdraft, a personal loan, a credit card, store card, etc.
As soon as we have advised you that your Plan is in place, you should cancel all Standing Orders / Direct Debits to creditors on the plan, taking care to ensure that any payments to priority creditors such as mortgage, council tax, water rates, gas, electricity etc, are maintained or re-arranged.
It is a strong possibility that if you are with a bank where you have credit facilities like an overdraft or loan, they may take steps to collect the money owed to them as soon as your salary or any other payment is paid into your account.
You should think about opening another account with no overdraft facility and with a bank you do not owe money to. This will give you more control over your money and will help to make sure that all your lenders get fair payments at a level that you can afford. Our advisors will give you any advice you may need on how to change bank accounts.
If you are worried that your credit rating may stop you from opening a new account, take a look at the Evolution Current Account.
The Evolution Current Account offers:
- A basic bank account with no hidden fees or unexpected bank charges
- A MasterCard® prepaid card which can be used at millions of locations worldwide
- Pay your bills by Direct Debit and Standing Orders
- Earn cash rewards at leading high street retailers
- Simple, secure online banking
- Guaranteed acceptance – no credit checks*
- One off set up fee of £12.50 and a monthly management fee of £12.50
*UK residents aged 18 and over. Subject to satisfactory identity and residency checks
No. Since we do not lend you any money, we do not need to credit check you.
Once you have paid the initial set-up fee and your first months contribution, we will make a monthly distribution to your lenders on your behalf and will deduct our monthly management fee for that distribution. If we do not make a distribution, we do not take our fee.
We hold all monies sent to us for distribution to lenders in a client trust account with our bankers. This means that your money is completely protected. Lenders are paid within two working days of receiving payment from you.
Because you are making reduced payments, it will take longer for your debts to be paid off. Repaying debt over a longer period may increase the total amount to be repaid. Your credit rating will be affected in the medium to long term which means you could have trouble securing credit in the future. As part of our initial consultation, we will provide you with an estimate on the duration of the plan. Please understand that a Debt Management Plan is not an overnight solution.
We charge an initial set-up fee (which is equivalent to two monthly payments). This initial set up fee is retained by us for setting up your plan.
While negotiations are taking place, we will make a small token payment to your lenders. This means that your accounts do not go unpaid for two months.
The initial set-up fee includes:
- Drafting a bespoke payment plan
- Creation of a Debt Management Plan pack
- Communication with your lenders, either in writing or by telephone
- Calculation and issue of reduced payment proposals
- Preparation of the financial statement
- Home rep visits / help with Debt Management Plan pack paperwork for completion
We can arrange for a professional representative to collect the pack and any supporting documents from you. If you need help completing the information pack, our representatives will be more than happy to lend a hand.
We take a monthly management fee equivalent to 17.625% of each payment you make to us, subject to a monthly minimum of £35 and a monthly maximum of £100, plus £40 per annum paid on every anniversary of a plan. Specific costs will be notified to you in advance.
Click here for the full Debt Management Plan fee schedule.
These will be provided to you in writing prior to you entering into the agreement. A copy can be viewed here.
Because a Debt Management Plan is an informal arrangement, it is easy to change it as your personal circumstances change, and even to replace it with an alternative arrangement if that becomes more appropriate at a later date.
We aim to provide a professional service at all times. However, if you are unhappy with the service that you have received, please follow our complaints procedure explaining why you feel that your expectations have not been met.
If your circumstances change in the future, please contact us to discuss your situation. This will help us to ensure you have the right solution for your circumstances.