Debt management FAQs
- Why would my lenders accept my offer?
- Will I have to borrow more?
- What's included in my debt management plan?
- When will I complete my repayments?
- What are the costs involved?
- What happens if I have second thoughts?
- Can debt management help freeze interest and charges?
- Can debt management help me?
- How can a Personal Finance Manager help me?
- Do you deal with my lenders?
- Will debt management affect my credit rating?
- How do I apply for debt management?
Why would my lenders accept my offer?
Your lenders would rather you keep up reduced payments and repay your debt, rather than make commitments you cannot meet. Your repayment plan will demonstrate to your lenders that our reduced offer is a realistic solution to your current difficulties.
Your lenders don't have to agree to the reduced offer, and unless they do so interest and charges will continue to be added. However, because we understand their requirements and have nearly 20 years' experience providing debt management solutions your plan has every chance of succeeding.
Will I have to borrow more?
No. Debt management makes your existing debts more affordable by negotiating a reduction in your monthly payments and, unlike a debt consolidation loan, doesn't require you to borrow more.
Bear in mind that because debt management means that you're paying less for longer, you may end up paying more in interest (unless interest and charges are frozen).
What's included in my debt management plan?
You'll get the ongoing help of your own dedicated Personal Finance Manager throughout your time on the plan, plus:
- A reduced monthly repayment plan we've agreed with your lenders so you know exactly where you stand.
- Help with lender communications: Our Creditor Liaison team take care of all contact, and you can send any letters you receive from your lenders to them.
- Regular updates throughout, quarterly statements and six-monthly reviews to make sure your plan continues to be right for you.
When will I complete my repayments?
It varies from person to person, based on what you owe and what you can afford to pay towards your unsecured debts each month. Because your payments have reduced it will take you longer to pay off than your original agreement and you may end up paying more. However, should your situation improve we'll renegotiate your repayment plan so that you're paying off your debt in the shortest possible time.
What are the costs involved?
We charge an initial fee then an ongoing monthly management fee.
- The Initial fee will be the same as your first monthly payment subject to a minimum of £225 and a maximum of £475 (note: this will be taken from your first payment, not added to it - you'll only ever pay what you can afford)
- The Monthly fee will be 15% of your monthly payment subject to a minimum of £32.50 and a maximum of £85.00 (note: this is taken from your regular monthly payment, not added to it)
What is covered by the Initial fee?
The Initial fee covers the work that goes into setting up your debt management plan including:
- Checking and completing the draft payment plan we created during our initial discussions.
- Working out each lender's reduced payment proposal.
- Creating your financial statement.
- Talking to each of your unsecured lenders to negotiate reduced repayment proposals and reducing or freezing interest and charges.
Because your first payment is the Initial fee and doesn't go to pay your lenders, your existing accounts will go further into arrears temporarily. There's no need to be concerned as from your next payment on you'll be reducing your debt.
What is covered by the Monthly fee?
Your monthly management fee includes all ongoing administration of your debt management plan plus unlimited access to your Personal Finance Manager: They can help you resolve any financial issues you may have and provide support throughout your time with Gregory Pennington. We will:
- Calculate and finalise your payment plan
- Conduct all negotiations and communication with your lenders
- Arrange your Personal Finance Manager and set up your quarterly payment statement
- Distribute the agreed payments to your lenders
- Undertake regular reviews (at least every six months) and monitor your progress to ensure the smooth running of your debt management plan
- React to any problems you may have maintaining your debt management plan and ask your lenders to accept reduced payments if necessary.
What happens if I have second thoughts?
If you decide debt management isn't right for you after you've started, simply inform us.
- There are no charges if you cancel within the initial fourteen-day cooling-off period after you join us and you're entitled to a full refund of the Initial fee.
- If you change your mind after the fourteen-day cooling-off period (although you wouldn't be entitled to a refund of anything you've paid already). Just give us two weeks notice so we can inform your lenders.
Can debt management help freeze interest and charges?
Yes, providing your Lenders agree. We always try to negotiate a reduction or freeze in any interest and charges so more of your money goes towards reducing what's outstanding.
Can debt management help me?
It may be that a little financial planning is all that's needed to get your finances in order and we'll happily advise you on how to work out a budget. However, if your situation is more serious or you feel unsure about dealing with your debts alone a debt management plan gives you real hands-on help.
The best way to assess whether a debt management plan is right for you is to talk to a professional debt adviser. They can also explain the alternative solutions – such as bankruptcy or an IVA – and recommend the one that's best for you.
How can a Personal Finance Manager help me?
On a debt management plan your Personal Finance Manager is like an adviser and personal assistant rolled into one. They have a thorough understanding of your finances and will distribute your payments, talk to your lenders on your behalf, and make sure your debt management plan runs smoothly. Many clients have said that their PFM was vital to the success of their plan because of the reassurance it gave them to have an 'expert on tap' when any issues arose.
Do you deal with my lenders?
When we set up your debt management plan we'll speak to all your unsecured lenders to negotiate reduced monthly payments on your behalf. We'll ask them to redirect all correspondence to us and, for the entire time you're with us we'll be their point of contact. Should you receive any correspondence from them, just send it to us.
Will debt management affect my credit rating?
Because you are asking your lenders to accept a change to the original agreement (and freeze or reduce interest charges) they could issue a default notice against you, affecting your credit rating. On the other hand, by doing nothing and allowing your debts to continue to accumulate you could risk more serious consequences such as your lender applying for a CCJ or issuing a final demand.
How do I apply for a debt management plan?
Simply ring us on either of the numbers at the top of this page, or fill in the free callback form and we'll call you free of charge in a few minutes. Our advice is free, confidential and there's no obligation.
It would help if you're prepared: Simply gather as much information as you can on your monthly outgoings, wage slips, benefits and debts etc., so that we can assess your situation.
- 0800 161 3516
- 0161 605 4824