Debt Management FAQs
Questions:
- Cancellation
- Do I incur any charges if I cancel my plan?
- What happens to any money held for distribution if I cancel?
- Contact us
- How do I contact Baines & Ernst?
- Credit and creditors
- Do creditors always accept reduced payment offers?
- What if my creditors continue to pursue me for payments?
- Will I receive a Default Notice?
- Will the plan affect my credit rating?
- Will the plan prevent my creditors taking further recovery action?
- General
- Can I take out a plan if I already have CCJs against me?
- Can I take out a plan if I am a homeowner or tenant?
- Do I have to be in full time employment?
- Do I have to tell my partner?
- Does the Payment Plan cover all of my debts?
- Is this a loan?
- What is the difference between a secured and unsecured debt?
- Will I be credit checked before acceptance?
- Time and costs
- How are the fees collected?
- How is my money held until it is distributed to my creditors?
- How long will the plan take?
- How much does the service cost?
- What if my circumstances change?
Answers:
- Do I incur any charges if I cancel my plan?
No, you can cancel with us at any time without any further charge. - What happens to any money held for distribution if I cancel?
We will refund to you any monies you have paid us which we have not yet distributed at the time you cancel with us. - How do I contact Baines & Ernst?
It's easy to talk to our debt management advice team, simply call on 0800 096 1331, use the 30 second debt test or click here to contact us about Debt Management Plans online. - Do creditors always accept reduced payment offers?
Creditors do not have to accept any offer of repayment below the contracted minimum. However it is our experience that mainly they are prepared to accept reduced repayment offers where we are able to demonstrate that the offer we have made is reasonable and that you are committed to repay your debts by use of the plan. - What if my creditors continue to pursue me for payments?
Certainly in the short term, your creditors will continue to take action to recover your debts. Do not ignore them. Deal with calls politely, informing creditors that you have appointed Baines & Ernst to act on your behalf. You should forward any letters to us to deal with on your behalf. - Will I receive a Default Notice?
By coming on plan with us, you will be in default on your original credit agreement and your creditor is therefore entitled to send you a Default Notice. Creditors send out Default Notices to protect their own legal position. - Will the plan affect my credit rating?
Because taking out a plan will result in your not making the contractual repayments on your unsecured debts, you should expect that your credit rating will be adversely affected in the short to medium term. However, your credit rating may already be poor if you have arrears or a history of missed or late payments. - Will the plan prevent my creditors taking further recovery action?
We cannot guarantee that your creditors will not take further action, including court action to recover debts from you but, if they do, we will help you respond so that any repayment that is required is within your ability to repay. - Can I take out a plan if I already have CCJs against me?
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 when you talk to us before coming on plan. - Can I take out a plan if I am a homeowner or tenant?
No. It makes no difference whether you are a tenant or homeowner or even if you are still living with your parents. - Do I have to be in full time employment?
No. To come on plan, you only need to have a surplus of income above what you need to live on. - Do I have to tell my partner?
We believe that it is always best to be honest with your partner. However, you only have to tell your partner if you have shared debts and/or you need your partner’s income to be taken into account to support the plan. - Does the Payment Plan cover all of my debts?
No. A debt repayment plan can only cover your unsecured debts and arrears. - Is this a loan?
No. We neither lend you money nor pay off your debts. Your payment plan is a solution that allows you to repay your creditors at a monthly rate that you can afford. If you do not make payments into the plan, we cannot make payments to your creditors. - What is the difference between a secured and unsecured debt?
A secured debt is a debt secured against an asset that you own. Typical secured debts will be a mortgage, a secured loan, a car loan, etc. An unsecured loan is any loan not secured on an asset, such as a bank overdraft, a personal loan, a credit card, store card, etc. - Will I be credit checked before acceptance?
No. Since we do not lend you any money, we do not need to credit check you. - How are the fees collected?
Once you have made payment for our initial fee for setting up your plan, every month we make a distribution to your creditors on your behalf, we deduct our fee for that distribution. If we do not make a distribution, we do not take our fee. - How is my money held until it is distributed to my creditors?
We hold all monies sent to us for distribution to creditors in a client trust account with our bankers. This means that your money is completely protected in the event of our insolvency. - How long will the plan take?
Because you are making reduced payments on your debts, it will take longer for your debts to be paid off. As part of our initial consultation with you, we will provide you with an estimate of the likely time you will be on plan. Please understand that a Debt Management Plan is not an overnight solution. - How much does the service cost?
We charge an initial set-up fee which is retained by us for setting up your plan. We then 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 £90. Specific costs will be notified to you in advance. There are no other hidden charges. - What if my circumstances change?
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.