DebtStopDirect

Questions

Answers

Won’t you just consolidate my debt into one expensive loan? Will you deal with all of my debts?

No. Financial management companies offer repayment programmes that are NOT consolidation loans. They help you work out an affordable monthly repayment figure based on your income and expenditure commitments, and administer and distribute payments to your creditors from that amount each month

If your circumstances are not best served by a Debt Management programme, we will advise accordingly. This may involve suggesting that we refer you to partner companies offering Insolvency advice, IVA's or a range of debt consolidation loan.

Once up to date balances from your creditors have been received, your monthly payment between them are pre portioned based on how much each is owed. A statement showing how much each creditor will receive will be issued. This remains fixed unless your circumstances change. You will be issued a quarterly statement showing all transactions on your account. In addition to this, you will still receive statements from your creditors.

Negotiations are made with your creditors to reduce your monthly payments. They are requested to freeze or reduce their monthly interest charges. A single monthly payment is taken form yourself and paid to your creditors on your behalf. This will make managing payments simpler.

Explain that we are acting on your behalf and will be making proposals for payment in due course. Get a name and telephone number from the creditor and contact us with it. We will then contact the creditor and update them on your case.

You can open an account with any bank that you don't owe money to. You need to tell them that all you require is a basic bank account that you can pay money into and set up direct debits or standing orders for bill payments.

Some creditors may say that they have not heard from us in order to put pressure on you to make a payment to them. Simply get a contact name and telephone number from the creditor and we will contact them to confirm when and how we have contacted them.

I get a letter from a creditor that wants to call and see me at my home or asks me to visit their offices?

You do not have to agree to this. Simply inform us who the creditor is and we will contact them on your behalf and explain what your intentions are.

Usually bailiffs can only become involved if you have stopped making payments after a County Court Judgement has been issued. Some creditors will mention bailiffs as a scare tactic to get you to make payment. If you are not sure what to do, please contact us.

I receive a letter saying that one of my debts has been passed onto another company to deal with?

You will in due course receive correspondence from the company that the debt has been passed on to. This will usually be a third party debt collecting agent or the debt collecting division of a firm of solicitors. When this happens you need to send the correspondence to us as soon as possible so that we can contact them to inform them of your current circumstances.

You need to inform us immediately if you have another creditor to add to the ones we already know about. Failure to disclose all creditors can jeopardise any agreement whether legal or informal that we make with your creditors

An Individual Voluntary Arrangement (IVA) is a legal contract made between you and your creditors. You agree to make a set monthly payment to the supervisor of the arrangement for up to 5 years.

The payments you make will be distributed on a regular basis to your creditors. In return for you making a commitment to pay what you can reasonably afford your creditors will agree to be bound by the arrangement.
Once you have set up an IVA and provided you keep to your part of the agreement you will not have any further obligations to your creditors. This often means you will only repay a small amount of your total debts because creditors understand this is all you can afford to pay within 5 years.
If you find you are having difficulties in maintaining the payments you promised to make because of unforeseen circumstances the arrangement can be altered provided creditors agree.

All fees and costs of the arrangement will be met from the single monthly payments you pay for the IVA. This means that for example if you owe £30,000 and the IVA is set up on the basis that you pay £300 per month for 60 months this is all that you will repay. The costs of the arrangement will be paid from your monthly payments of £300 and the balance will be paid to your creditors.