Things you must do/ and inform your advisor:
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All unsecured debts should be added to your Personal Plan.
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Inform your advisor of any major changes to your income or expenditure.
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Any changes to your phone numbers, address, email, etc you must inform your advisor.
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Any letters informing you that your debt has been transferred to another company.
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Any letters from the courts.
Is it a loan?
No, a debt management plan is exactly what it says. It is a way to help manage your debts. We do this by offering a reduced payment to each of your creditors and then negotiate to freeze interest and charges.
How long will my Debt Management Plan (DMP) last?
The length of your DMP depends on your individual situation. It also depends on your level of debt and the monthly disposable income available.
When creditors freeze interest and charges, the length of the DMP can be greatly reduced. Example, if you owe £15,000 and you can afford to pay £180 per month the DMP will last for just short of 7 years (83 months). This applies only if the payments are maintained each month and the creditors freeze interest for the length of the plan. Your DMP can be completed sooner if your circumstances improve and your payments are increased.
Will my creditors agree to my a payment?
Creditors don’t actually have to agree to the payments. If the payment offer is not accepted by the creditor the likelihood is that the debt will be sold to a collector who will accept payment, but only if the offer is realistic.
Will interest and charges be frozen?
Creditors are not obliged to freeze interest and charges but because R & R Financial Solutions has a reputation for realistic payments the creditors are often more co-operative as they see that the debtor is making every effort to clear their outstanding debts. The creditors will make their decision on freezing interest and charges when they have viewed the Statement Of Affairs (SOA) compiled by your personal advisor.
Can my creditors still issue me with a County Court Judgement? (CCJ)
As an informal arrangement (DMP) isn’t legally binding, creditors are still entitled to take action against you. We will complete all the relevant paperwork required if this happens, and the payment is likely to remain similar or the same to our original offer.
Will I get a default notice?
Your creditors are entitled to issue a default notice as in reality you are defaulting on your original credit agreement. This does not mean that the creditor is definitely going to take action.
Note: If a default notice is issued, this will stay on your credit file for 6 years from the date of its issue.
How do I make the payments?
The payments will be collected by us usually by standing order and then paid to the creditors. Based on the information you provide we will then disburse your funds to the creditors or their appointed collectors.
Can I cancel my debt management plan when I like?
You are free to stop the debt management plan at anytime but we insist you put it in writing to R & R Financial Solutions so we can inform all of your creditors of your intentions. If you are stopping your DMP due to further financial problems please let us know and we may be able to restructure your plan.
Note: If you cancel the DMP, creditors may resume interest and charges.
Who informs the creditors?
Your personal advisor will contact your creditors to inform them of our intentions to enter into a DMP. They will explain your situation and present a statement of affairs (SOA) which will outline the offer of payment to them, this should mean that the amount of communication is eased and will cut the stress involved.
How will your creditors react to your Informal Personal Plan?
The majority of your creditors will be sympathetic to your situation and will recognize your efforts to repay your debt. They will usually reduce or totally stop charging interest.
Unfortunately, some creditors will not and if all of your creditors refuse to stop charging interest, then this will prolong the timescale of your Personal Plan. Also, some of your creditors may continue to contact you for a short time to request that you increase your offer of repayment. Remain calm and relaxed and explain that at present you are in no position to increase your monthly amount. Do not be pressured into making increased payments. Feel free to contact us if you are concerned about this.
Correspondence you may receive from your creditors:
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CORRESPONDENCE TYPE |
WHAT TO DO |
| County Court Claim Form This will be sent if the debt is to become a county court judgement CCJ |
Let your advisor know immediately and they will advise you what to do/or they will fill it in for you. |
| Third Party Creditor-New Creditor This type of letter means your debt has been passed to a third party. |
Let your advisor know immediately so they can be sure your payments go to the correct company dealing with your debt. |
| Default Notice This will normally be sent if you have not stuck to the terms of the original contractual arrangement. |
Tell your creditor that you are in no position to pay in full and will continue to pay through your personal plan. |
| Debt Collector to your house notice. A postcard or letter |
This very rarely happens so Don’t Panic. If it happens and they call at your home explain the solution you are on and the amount you are paying and DO NOT give them any money. |
| Arrangement Expired Creditor requiring an update on your situation |
Your advisor will arrange this and will arrange to complete a full statement of affairs to clarify the present situation. |
