What is a debt management plan?  It’s an informal agreement with your creditors to repay your debts back in full at a rate you can afford based upon our review of your personal circumstances.  The payment is based on your level of unsecured debt and on the assumption that creditors will freeze interest and other charges.  A debt management plan is not suitable for everyone.  That’s why we will undertake a full review of your circumstances before identifying the range of options available to you.  We will then discuss these with you thoroughly before reaching an agreement about the most appropriate solution.

What’s included within the plan? Your plan only includes your unsecured credit arrangements.  You will still need to make sure that you pay “priority debts.”  

What are priority debts/expenditure? These are items of expenditure that can have serious consequences if you don’t pay them.  You could face eviction, loss of your home or other assets, fines or even imprisonment, depending upon the specific debt.

The following are areas of priority expenditure: Rent, mortgages or other debts that are secured against your property; Court fines; Council tax; TV licence; Gas and Electricity; Maintenance or child support; Tax and National Insurance; Student Loans and Hire-purchase agreements.

Will creditors agree to freeze interest and charges? Creditors don’t have to freeze interest and charges and if they didn’t but you still reduced your payments then it would take you longer to repay the debt and cost more over the term.  That’s where we come in as we use our experience and “know how” to negotiate with them and do all we can to seek agreement.

Will creditors stop taking action against me? Creditors can continue with any action they have already started or threatened to take.  Where they do take action this can result in default notices and costs being added to your account.  We will be working hard to negotiate with them and aim to get them to stop any planned action thus avoiding costs and worry for you, although please bear in mind that we can’t guarantee this.

Can I choose between weekly and monthly payments? Yes, if you choose to pay monthly, then we will distribute your payments on a monthly basis.  If you make payments weekly, for example, if this helps to you to budget, we will retain your money in our client account and distribute it on a monthly basis.

How do I know the money I pay is safe? The money you pay to us will be credited to our client account, which is a separate account specially set up to deal with client money.  This money is separate to our business account and cannot be used for any other purpose.  

What happens if my creditors contact me?  Well first of all don’t ignore them! Let them know that we are working on your behalf and we’ll be contacting them soon. Feel free to give them our details and ask them to contact us.

How will it affect my credit rating? Lenders provide credit reference agencies with information about your repayments on credit agreements and the information is held for 6 years.  This is used by other lenders to help make decisions when they receive an application for credit.  Your credit file may also be checked by future employers or if you apply for other financial services products.  The information includes details of late or missing payments as well as if a lender has issued a default notice.  When you take out a debt management plan, lenders may enter this information onto your credit file and they may issue a default notice.  This means that it may be harder and more costly to obtain credit in the future.  Remember, getting more credit is probably the last thing you should do as it will make your situation more difficult to manage.  

What fees do I pay? We make a monthly charge of £29.38 which is deducted from your monthly payments with the balance being paid to your creditors.

Can I change my mind about a debt management plan? You can change your mind within 14 days after receiving the terms and you will have nothing to pay.  If you’ve already made your first monthly payment it will be refunded to you in full, less any amounts already paid to your creditors.

What if I’m not happy with the service you provide? We pride ourselves on the quality of our service but if you feel that we haven’t delivered then we want to hear from you.  Call us 0800 0727 844, email us at emma@creditandloan.co.uk or write to us at Credit and Loan Management Limited, 20-22 Wenlock Road, N1 7GU. We will acknowledge your complaint within 5 working days and investigate it thoroughly notifying you of our findings.  If you’re not happy with our response to your complaint or it hasn’t been resolved after 8 weeks you can refer it to Financial Ombudsman Service, who can be contacted as follows:

Financial Ombudsman Service, Exchange Tower, London. E14 9SR.

Telephone 0800 023 4 567

Email complaint.info@financial-ombudsman.org.uk.

www.financial-ombudsman.org.uk.

You will generally have to refer your complaint to the Financial Ombudsman Service within six months of our final response letter, otherwise the Financial Ombudsman may not have our consent to investigate the complaint.

Free debt counselling, debt adjusting and providing of credit information services is available from the Money Advice Service.