Debt management FAQs

Frequently Asked Questions

What's the difference between debt management and debt consolidation?
Will a debt management plan handle all my debts?
Why would my creditors accept lower payments?
How much would I pay per month?
Can't I negotiate with my creditors myself?
Would I end up in debt for longer?
Would I end up paying more?
How do I know debt management is right for me?
What if my circumstances changed?

What's the difference between debt management and debt consolidation?

Debt consolidation involves taking out a new loan to pay off all your unsecured debts in one go. You'd start making a single payment per month - to your new lender.

A debt management plan is an informal agreement with your lenders. Basically, our advisers would contact your creditors and ask them to accept lower payments, based on what you can realistically afford without taking up money you need for your essential day-to-day costs. You'd start making a single monthly payment to our partners, who would distribute it among your lenders.

Will a debt management plan handle all my debts?

No - a debt management plan would handle your 'non-priority' debts (like unsecured loans and credit card, store card, overdraft & catalogue debts).

It wouldn't handle your 'priority' debts (mortgage, secured loans, council tax, etc.), but it would help you make sure you can afford them, since your payments to your plan would be based on your disposable income - the amount you have left every month after you've set aside enough money for your essential costs.

Why would my creditors accept lower payments?

If you can't afford to make the payments you agreed to, we need to show this to your creditors, so they can see you can't pay (rather than won't pay).

Lenders aren't obliged to accept any changes to your repayment plan. They can either accept the maximum you can afford or consider taking legal action against you, such as taking you to court. In many cases, lenders choose to accept lower payments, as legal action can take a lot of time and effort - and a county court won't order borrowers to pay more than they can afford to pay anyway.

How much would I pay per month?

It's different in every case, as the amount you pay would be based on what you can afford after you've accounted for your essential costs. If you'd like to know what it might cost you, please contact us.

Can't I negotiate with my creditors myself?

Of course. However, many people choose to go with a professional debt management company because they want to benefit from their experience of negotiating, as well as their knowledge of debt, consumers' rights, and so on.

Plus, we have been running debt management plans for 15 years and enjoy good working relationships with all the major creditors in the UK.

Would I end up in debt for longer?

If you repay a debt more slowly, it'll take longer to pay off. On the other hand, your debts won't grow as fast (or at all) if your lenders agree to freeze or reduce interest and waive charges.

Would I end up paying more?

Again, you might end up paying more if your debts accrue interest for longer because you're repaying them more slowly. On the other hand, remember our partners will ask your lenders to freeze interest and waive charges, which means your debts won't be growing as you pay them off.

How do I know if debt management is right for me?

If you can't afford to keep up with your payments to your unsecured debts, debt management could be right for you - as long as you think you can repay your debt in a reasonable period of time.

It's best to discuss this with a debt adviser. Contact us today.

What if my circumstances changed?

If your circumstances change and you can't keep up with the payments agreed in your debt management plan, your lenders may be willing to accept lower payments until your financial situation improves. Again, our advisers would help you figure out what you can afford to pay per month, and they would carry out all negotiations and correspondence with your lenders.

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