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Debt Management

Example

• Debts under £17,000 and able to clear within 5 years
• Equity in property exceeds debt level but cannot remortgage and need to achieve affordable repayments to creditors
• Short term loss of income – maternity – redundancy  and clients need help with managing their debts.

There is normally no debt forgiveness with debt management however, after a 6 to 12 month period on debt management creditors usually are willing to settle the debt at a discount of around 25% to 30%.
Whilst Debt Management may be the correct route for a client at the point of referral; the client always has the option to apply for an IVA or Remortgage/Secured Lending should their circumstances change.
Criteria
Debts

• Minimum of £1,800 of unsecured debt
• Debt levels under £17,000 (where an IVA is not viable, debt levels can be higher)
• At least two creditors and two lines of credit (i.e. not all Lloyds TSB)

Debtors Location

• Debtors can be based in any location throughout the United Kingdom

Homeowner/Tenant

• Relevant for either

Minimum Monthly Payments
The minimum contribution per month is £100 for a Debt Management Plan. A higher contribution will reduce the term of the plan and the amount of fees paid.

Debt Management Fee Structures
Each Debt Management plan is subject to the following fees:

Initial Fees: Equal to the clients monthly contribution taken from the first payment; however, there is a minimum fee applicable of £200, where the contribution is lower than £200 the fee will be taken from multiple contributions.

Ongoing Fees: 17.5% of the clients monthly contribution with a minimum taken of £25 and a maximum of £100 per contribution.

Referral Fees
50% of Initial Fees for the assistance with preparing financial information on behalf of the client. This fee is payable at the same time we receive the full initial payment.

The level of referral fees we pay depend on the volume of cases you refer to us each month. There are different tiers of payment which cover the following:-

• One or two referrals a month
• More than 10 paying clients per month
• More than 20 paying clients per month