Example Debt Management Plan
Mr Smith had overcommitted and his finances had spiralled out of control. He took out credit cards and loans to help with his living expenses and found that he could no longer afford the minimum repayments. He often found he was paying one credit card off with another and therefore, his debt wasn’t actually decreasing.
Client Situation before Debt Management
| Total Unsecured Debt |
| £13,400 |
| Contractual Monthly Payments |
| £335 per month |
| Methods of repayment |
| Subsidising income with credit cards |
Debt Management solution
| Total Unsecured debt in DM plan |
| £13,400 |
| Total Income (Approximate) |
| £1,125 |
| Total Expenditure |
| £975 |
| Payment to DM Plan |
| £150 |
Payment Breakdown
| Estimated Debt | £13,400 | | |
| Disposable Income | £150 | | |
| Setup Fee | £300 | | |
| Management Fee per month | £26 | | |
| Distribution to creditors | £124 | | |
| Estimated Term | 108 Months | (Equivalent to 9 years) | Assuming all interest and charges are frozen |
| Estimated Fees | £3,142 | | |
| Estimated Repaid | £16,542 | | Assuming all interest and charges are frozen |
Under the Consumer Protection (Distance Selling) Regulations 2000, you have the right to cancel your arrangement with us at any time, which should be made in writing to the address given under section 'The Agreement' in your information pack. If you cancel your arrangement within 7 days of agreeing to our Terms of Business, we will refund any payments we have received from you during this time. If you cancel at any time after the first 7 days, no further charges will apply. We will also refund any monies that have not been distributed to creditors at the time your notice cancellation is received and we will inform creditors of your decision. Should you choose to cancel before your debts are paid, creditors are likely to end any payment arrangements previously agreed. This may lead to charges being re-applied to your debts. You will then also be responsible for dealing with all of your creditors direct.
The Next Step
All debt solutions should be very carefully considered; we will always provide you with the best advice to ensure you get a soft landing away from the burden of debt. Simply forward your details on our Contact Form and we will contact you. Alternatively ring us on our FREEPHONE ADVICE LINE 0800 085 1825 to have a full consultation with our specially trained advisors.
The Insolvency Service has produced a guide: In Debt - Dealing with your creditors, to support those who find themselves in financial difficulty during the recession.
Financial Information
All debt solutions should be very carefully considered. Fees will be charged if a solution is taken in order for us to set up and maintain your plan - all fees will be outlined during your consultation. For further information on fees, please see the FAQ section of the different solutions available. Retained payment may place you further into arrears. The Debt Advisor complies with the Consumer Credit Act and you have a right to a cooling off period of 7 days. It is likely that your ability to obtain further credit in the short term will be affected and this may also be the case of the medium to long term.
All debt solutions should be very carefully considered. Fees will be charged if a solution is taken in order for us to set up your plan and maintain it - all fees will be outlined during your consultation. For further information on fees, please see the FAQ section of the different solutions available. Retained payment may place you further into arrears. The Debt Advisor complies with the Consumer Credit Act and you have the right to a cooling off period of 7 days. It is likely that your ability to obtain further credit in the short term will be affected and this may also be the case over the medium to long term. Calls to our free phone number from mobile phones and other networks may be charged.
Company Registration: 06248441 | Consumer Credit Licence: 0606669 | Data Protection: Z9973946