Debt Management Plans
Is this a loan?
No. We do not lend you money or pay off your debts. Your debt management plan is a solution that allows you to repay your creditors at a monthly rate that you can afford.
Is DEBTPLAN Direct™ a regulated company?
We are licensed under the Data Protection Act as well as being and licensed and regulated by the Office of Fair Trading for debt adjusting and debt counseling services. We are members of the Debt Resolution Forum (DRF) who exist to promote professional standards and are focused on the quality of advice provided to consumer debtors. Further information on the Standards, Code and Complaints procedure and the DRF link can be found on our website.
Will I be credit checked before acceptance?
No. Since we do not lend you any money, we do not need to credit check you.
Can I come on the 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 the plan. Once the plan is setup, it is important that you keep up with the monthly payments to us as missing a payment for your CCJ debt may result in the creditor applying to the Court for bailiffs to be sent to your residence.
Does it make a difference 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 the plan, you only need to have a surplus of income above what you need to live on.
Does the Payment Plan cover all of my debts?
No. A debt repayment plan can only cover your unsecured or non- priority debts such as credit cards and unsecured loans.
Do creditors always accept reduced payment offers?
Creditors do not have to accept any offer of repayment below the contracted minimum neither are they obliged to freeze interest or charges. In such instances you will repay the same debt over a longer period of time which will mean there will be an increase to the total amount of debt to be paid. However it is our experience that 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.
Will the plan affect my credit rating?
Your credit rating may already be poor if you have arrears or a history of missed or late payments. You should expect that your credit rating will be adversely affected and is not likely to improve earlier than when the payments on your debt is completed, or even immediately thereafter.
Why will it affect my credit rating?
Starting a reduced payment plan will result in you not making contracted repayments on your unsecured debts this will be reflected on your credit file. Your first two monthly payments will be taken as a fee to set up the plan this will lead to a period where contractual payments are not made to creditors, this may affect your ability to obtain further credit.
Will I receive a Default Notice?
By coming on the 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. There is a possibility that costs may be incurred and added to the balance of any outstanding debts as a result of a default notice being issued.
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.
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 DEBTPLAN Direct™ to act on your behalf. You should forward any letters to us to deal with on your behalf.
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 the plan. Please understand that a Debt Management Plan is not an overnight solution.
What if my circumstances change?
Because a Debt Management Plan is an informal arrangement, we can amend your monthly payment in line with your changing personal circumstances, and even to replace it with an alternative arrangement if that becomes more appropriate at a later date.
How much does the service cost?
To cover our administration costs in setting up the plan we will charge you a set up fee equivalent to your first two monthly installments. Each month thereafter, we charge a monthly management fee equivalent to 15% of the monthly payment you make to us, subject to a monthly fee of £39.00. This is included in your monthly payment plan and not added as an extra fee.
Can I cancel my plan at any time?
Yes you cancel with us at any time without any further charge. This is not a legal contract neither are you tied in for any fixed length of time, all you have to do is give us 1 week’s written notice of cancellation.
How long will DEBTPLAN Direct™ take to forward this payment to my creditors?
We will issue payments to creditors within 5 working days of receiving your cleared payment. If for any reason there was a delay in issuing these payments, exceeding 5 days from the date in which we received your payment, we will contact you to inform you along with an explanation why.
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 account with our bankers. This means that your money is completely protected in the event of our insolvency.
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.
Should I stop all of my direct debits and standing orders now?
Yes, you should cancel all direct debits and standing orders you have set up which are due to go out to your unsecured debts which you wish to include on the plan. Remember you do not cancel any payments toward your secured or priority debts such as your mortgage, secured loan, TV license, council tax, rent, utility bills etc.
