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. 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. Which resulted in a substantial amount of individual debt in their personal names and difficulty in repayment of debt.
Both clients contacted our office for suitable debt advice and to maintain DEBT MANAGEMENT PLAN payment. It was hard work scraping together money wherever possible to overpay it. They did it and now they can say that debt freedom tastes good. I will describe what it’s like living day to day whilst in a Debt Management Plan.
The beginning of the 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 Management Plan can be managed by just one call and that one call has to be made by you as a debtor who needs 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 at firstname.lastname@example.org. All debt advice is confidential and impartial.
There are debt charities available in each borough throughout the 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. 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. 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(DMP) yourself. So, they can handle this side of things for you.
FCA Debt Management Regulation
As new regulation of Debt Management Plans is in force under the 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. They might put a little pressure on you if they know you’re defaulting (or about to default) on your payments.
DMP companies know your rights better than you will. They have no emotional involvement in your situation, so there are definite benefits of letting them handle your creditors. It takes a lot of stress and worries out of the equation.
Let Acme Credit set up your Debt Management Plan – Contact them for free advice
During a difficult time with your debt repayment on contractual terms and delaying or defaulting contractual payments. You might receive letters and phone calls from your creditors demanding payment.
This is a routine debt recovery practice that is also now under FCA regulation. 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 to your DEBT MANAGEMENT PLAN Company that they should initiate updating your creditors. Tell them, you have now a debt management plan company involved in your debt restructuring and payment proposals to them. Most of the lenders will allow a grace period of two-four weeks. They should 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
You will not receive any further collection and recovery calls once your debt management plan is set and agreed upon.
You can still be chased by your creditors because the original contract has been breached. However, there are a few things you may consider doing if this situation arises.
Your debt solution company will prepare your credit commitments. The DMP company must conduct realistic financial due diligence to prepare a realistic financial statement. It could result in a disposable income to offer repayment to your creditors on a pro-rata basis. Your repayment proposal must be based on pro-rata (whoever owes more will get more from your disposable amount).
If your income increases, you will be expected to pay more towards your Debt Management Plan.
For the duration you’re in a DMP, 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 on what is your suitable debt solution plan. An informal debt plan (DMP) is a result of direct contact with your creditors. Your formal debt plan is normally registered on the insolvency register of UK government and anyone can assess it.
An informal debt plan can be assessed by anyone via free search. (Bankruptcy Register)
You don’t have to tell anyone that you’re on 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, as we did). You may find it easier to let those closest to you know about it.
When you’re on a Debt Management Plan, you should have enough money to live on after paying your bills. 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 ASAP.
If your income increases or you find your financial situation changing for the better, let your debt management company know. You can pay more for 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 management plan 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 a 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 a DMP
If you’re on a Debt Management Plan, then your finances were probably at a stage where they were out of control. 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 is always a learning when you are under debt problems. 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!
Rajnish Tyagi is an experienced and Cert DR qualified debt advisor at Acme Credit Consultants Ltd, Which specializes in offering suitable debt solutions to clients.
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