How debt management works
- One affordable, tailored monthly payment - although paying less each month means repaying may take longer and end up costing more
- Professionals dealing with your lenders - they may agree to freeze interest rates and charges once we've talked to them on your behalf
- Repays your unsecured lenders and helps you avoid insolvency - secured debts, like your mortgage, aren't covered and you'll have to continue repaying them separately
We understand that dealing with multiple lenders when you're struggling financially can be really difficult, especially if you're trying to do it alone. If you qualify for a debt management plan from Gregory Pennington, we could help.
How does debt management work?
A Debt Management Plan works by using your spare income to repay your unsecured lenders. You make one monthly payment to us, we take our fee, and we distribute the rest to your lenders. Lenders prefer a smaller, regular payment than no payment at all. As long as you stick to your repayments, your lenders should stop making any demands. Smaller payments will probably mean that it takes longer to repay your debt and it may also cost you more in the long term, but they'd also mean you only repay as much as you can afford every month.
In return for your fee, we speak to your lenders for you and we manage the relationship with them. They may even agree to freeze your interest or charges after we’ve spoken to them, although they aren’t legally obliged to do this.
It's worth remembering that your debt management repayments are always split up in a way that is fair to both you and your lenders, so you will always be left with enough for the things you need. If your debt management plan runs smoothly, and you keep up the payments you’ve agreed to, any legal or recovery action your lender was planning should be put on hold too. Again, your lenders don't have to agree to this - but we'll try to show them you'll repay everything you owe as quickly as you realistically can.
Lowering your repayments does affect your credit score for up to six years, which can make it more difficult or more expensive to obtain credit in the short to medium term. You should only apply for debt management if you really can't afford your repayments at the moment.
How the plan works
We look at all your outstanding unsecured debts and your income to work out if debt management is the right solution for you. There may be other options that would fit the bill that you haven’t heard about before, and we’ll be happy to tell you about them.
You can discuss your situation in confidence with us and we will be able to tell you if debt management is right for you based on your financial commitments. Only unsecured debts will be covered by the plan - any secured debts (such as your mortgage) won't be included, so you'll need to pay them yourself.
We make your plan work for you
We ask each of your lenders to accept lower repayments based on what you can afford. To make things fair for each of your lenders, we work out 'pro-rata' payments. Basically, that means the largest part of each repayment goes towards your largest debt.
As your repayments are lower, the time it takes to pay off your debt will obviously be longer. By the time you have finished, it may have also cost you more.
Debt Management Repayments
You send one repayment to us each month (or each week) and we distribute it to each of your lenders, after we've taken our fee. We understand that circumstances can change, so we review your repayment amount regularly to make sure it is still affordable, and that your lenders are still happy with it - and you can request a review as and when you need one.
Your lenders may freeze their interest rates and charges to help you reduce the amount you repay over the length of the plan. They don’t have to do this, but we will ask them – and many agree.
Your Personal Finance Team
We take over all communication with your lenders. Some lenders may still contact you while you're on Debt Management, because your debts are technically still in 'arrears'. However, you can forward any letters or phone calls onto your Personal Finance Team, who will be your point of contact here. You do not need to speak to your lenders anymore because they can do that for you.
As long as you keep making payments you've agreed to, the plan should run smoothly. Although, because you haven't stuck to the original terms from when you first borrowed the money, your credit rating will be affected and you may find credit is harder and more expensive to obtain for the next few years.
Will my lenders accept a debt management proposal?
Debt management is good for lenders too - they don't have to spend money chasing you for payment when they know you're repaying them as quickly as possible.
We cannot guarantee that lenders will accept your proposal, because they are not legally obliged to, but we will do whatever we can to make sure everyone's happy with the proposed solution.
Is our plan right for you? Find out if you can qualify
If you couldn't repay your debts in full within a reasonable amount of time, insolvency could be another option. We offer formal insolvency arrangements like IVAs and bankruptcy.
We also offer debt help in Scotland, including the statutory debt management scheme DAS (the Debt Arrangement Scheme), and more formal arrangements like Trust Deeds and different routes into sequestration.
To talk through all the options available to you and agree on a plan of action, just speak to a member of our team - in complete confidence, of course.
How do I apply for a Debt Management Plan?
You can begin your application when you complete the above form or call us on the number at the top of this page during our opening hours to find out if this is the right choice for you and how we could help.
- 0161 669 8925
- 0161 669 8925