Debt Management Plan –Living with it

Advance Financial > Blog > Consultation > Debt Management Plan –Living with it

Mr & Mrs Khan were in a Debt Management Plan for around 6 years before  they finally cleared their debts in March 2018. This happened due to losses in their own business where they tried to inject personal capital borrowed from their credit cards and loans to support dying business. Their business eventually went down as well as their personal income, resulting substantial amount of individual debt in their personal names and difficulty in repayment on debt.

Both client contacted our office for suitable debt advice and to maintain DMP payment ,It was hard work scraping together money wherever possible to overpay it – but they did and now they can say that debt freedom tastes good , I describe what it’s like living day to day whilst in a Debt Management Plan.

The beginning of debt problem is little scary

It does not matter if you are living in Hounslow, Hayes, Uxbridge, London ,Greater London, Luton, Manchester , Birmingham or anywhere in England or Wales ,your debt plan can be managed by just one call and that one call has to be made by you as a debtor who need help in sorting your debt. If you want to contact Acme Credit Consultants Ltd for immediate debt help ,you can contact on 0203 318 0990 or email them on debt@acmecredit.co.uk ,All debt advice is confidential and impartial .

There are debt charity organisation available in each borough through out UK and you can contact your local citizen advice bureau for free debt advice.

At first when you enter into a Debt Management Plan, things can feel a little scary. As a new debtor, You become little dubious with negative feelings about your creditor action and debt recovery via court enforcement. Because after you’ve worked out your budget, your creditors need to know that you can’t afford your minimum repayments and you then need to negotiate a lower payment with them. For this reason alone, it’s worth considering a debt management company involved as opposed to managing your Debt Management Plan yourself, so that they can handle this side of things for you.

As new regulation of debt management plans are in force under FCA regime, It’s not that your creditors will immediately come knocking down your door chasing for payment when you say that you’re struggling – far from it – because they have to listen to you if you’re saying that you’re in trouble and if you’re asking for help.

However, the prospect of admitting to your creditors that you’re struggling with your debts is daunting and they might put a little pressure on you if they know you’re defaulting (or about to default) on your payments.

Debt management companies know your rights better than you will, and they have no emotional involvement in your situation, so there are definite benefits to letting them handle your creditors. It takes a lot of stress and worry out of the equation.

Let Acme Credit set up your DMP –Contact them for free advice

During a difficult time with your debt repayment on contractual terms and delaying or defaulting contractual payments on your accounts you might receive letters and phone calls from your creditors demanding payment. Some creditors can be scarier than others and may say something along the lines of how you’ll be taken to court if you don’t pay up. This is routine debt recovery practice which is also now under FCA regulation so  If you have a debt management company involved, they will probably tell you to ignore the letters and phone calls whilst this process is taking place. You may also suggest your DMP Company that they should initiate updating your creditors via call that you have now debt management company involved for your debt re-structuring and payment proposals to them. Most of lender will allow a grace period of two-four weeks and will stop any sort of recovery method until the grace period expires. It may certainly help in focusing your daily routine work without worrying about creditors’ calls.

 

What to expect when your DMP is set up under Acme Pay Plan

Once your Debt Management Plan is set up, any chasing letters and phone calls should stop and life will become more peaceful again. There is a chance you may still be chased by your creditors because the original contract has been breached. However, there are few things you may consider doing if this situation arises.

Your debt solution company will prepare your credit commitments and conduct a realistic financial due diligence to prepare realistic financial statement which could result with a disposable income to offer repayment to your creditors on pro-rata basis. If your repayment proposal is not based on pro-rata (whoever owes more will get more from your disposable amount) ,it is likely that your repayment plan will not be agreed by your creditors and they will again start chasing your for debt repayment in full.

If your income increases, you will be expected to pay more towards your Debt Management Plan.

For the duration you’re in a Debt Management Plan, you will struggle to get credit elsewhere (that’s usually a good thing though). This is because once you’re making lower monthly payments to your creditors; you’re technically defaulting on your payments every month.

Who will know about your Debt Management Plan under Acme Pay Plan?

It depends what is your suitable debt solution plan as informal debt plan (debt management plan ) is a result of direct contact with your creditors by your debt management company and repayment plan is agreed with them directly however if you are under formal debt plan it is normally registered on insolvency register of UK government and your information can be assessed by anyone via free search.

You don’t have to tell anyone that you’re in a Debt Management Plan unless you want to. But if your Debt Management Plan will take a long time to complete (some take many years unless you try to pay it off much sooner – like we did), then you may find it easier to let those closest to you know about it. Otherwise you’ll need to be prepared to potentially answer questions from your family and friends about why you can’t do certain things which involve spending money.

When you’re in a Debt Management Plan, you should have enough money to live on after paying your bills and creditors but unfortunately you probably won’t have much money spare after those payments have gone out of your account.

Why you should aim to pay off your Debt Management Plan ASAP

Just because you’re in a Debt Management Plan doesn’t mean that you have to pay those reduced payments until the plan comes to a close many years later. If you want to get back on track with your credit rating as soon as possible, then you should do everything you can to get yourself out of your Debt Management Plan as quickly as possible.

If your income increases or you find your financial situation changing for the better, let your debt management company know  so that you can pay more into your Debt Management Plan. The sooner your Debt Management Plan is complete, the sooner you can move on with your life.

You should contact your debt solution company if you are about to receive some sort of family and friends financial support to pay your debts ,your debt solution company may offer partial settlement with your creditors to close your debt accounts completely.

Be proud of yourself and do not show your back when you are on DMP

If you’re in a Debt Management Plan, then your finances were probably at a stage where they were out of control. The fact that you’re in a Debt Management Plan and trying to get your debts back on the straight and narrow means that you’ve probably hit rock bottom and are well on the way back up. Be proud of yourself, because you’re doing what needs to be done to improve your situation. This is your light at the end of the tunnel!

One day, you’ll look back on your time spent with debt and although you might not laugh, you may not hold a grudge. Being in debt has its plus points believe it or not.

There are always lessons to be learned in every challenge, like debt, and it sounds like We have learned quite a bit! That’s only going to make us a much stronger person!

Debt teaches you something once you’ve picked yourself up from your rock bottom. It teaches you financial responsibility and it’s a lesson that you’ll benefit from throughout the rest of your life!

Prepared By:

The above description was prepared and written by Rajnish Tyagi @ Acme Credit Consultants Limited, based on real time experience shared by client Mr and Mrs Khan when their DMP came to an end.

Rajnish Tyagi is an experienced and Cert DR qualified debt advisor at Acme Credit Consultants Ltd, Which specialise in offering suitable debt solutions to clients. He can be contacted via email on debt@acmecredit.co.uk

X