Clear debts, subject to creditors approval
Is a Debt Management Plan a type of loan?
A Debt Management Plan is not a loan. All it does is place your debts with a third party who deals with your debts for you.
There are no credit checks to pass in order for you to clear debts.
Consumers attempting to take control of their debts are being warned to beware of unregulated loans that can lock them in for years and leave them at the mercy of sky-high exit charges.
The UK Insolvency Helpline’s advice team they is seeing an increasing number of people whose spending is out of control. On average, people who turn to the service for advice owe £31,000 – not including their mortgage - compared to £29,000 in 2004.
The rising trend means more of us will need to reduce interest and actively manage our debts. The large sums involved also mean that more will find themselves in the dangerous territory of unregulated loans.
As the name suggests, these loans fall outside the normal safeguards we have come to expect when we borrow money. They are typically loans made to individuals, outside any mortgage arrangements, for amounts above £25,000.
Personal loans for amounts below £25,000 are subject to the Consumer Credit Act. This ensures lenders cannot impose excessive fees or conditions on their customers.
These protections are particularly valuable when borrowers want to pay off debts early. In these circumstances the Act says lenders cannot charge a fee of more than one month's interest. Where the term of the loan is one year or less, no early repayment charge can be made.
Mortgages, although usually for more than £25,000, have their own protection provided by the Financial Services Authority. Its rules mean that when borrowers repay a mortgage early or fall into arrears, charges are limited to the costs the lender incurs.
You can Clear Debts.
None of these safeguards is enjoyed by borrowers taking out unregulated loans. Unregulated lenders include complicated and costly repayment penalties in the small print of their contracts. Arbitrary charges for early repayments are common and penalties can lock borrowers in for years, during which time they are also at the mercy of rising interest rates.
Listed below are some of the frequently asked questions on Debt Management Plans
- How do I know whether a Debt Management Plan is right for me?
- What are the advantages of a Debt Management Plan?
- What are the disadvantages of a Debt Management Plan?
- Is a Debt Management Plan a type of loan?
- How long will I have to pay a Debt Management Plan before I am debt free?
- How much does a Debt Management Plan cost?
- How much money will actually go to the companies I owe money to under a Debt Management Plan?
- How do I make the payments?
- If I have a change of circumstance can I stop the Debt Management Plan?
- Who tells the companies I owe money to that I am actually in a Debt Management Plan?
- Will the companies I owe money actually accept a a Debt Management Plan?
- How a will Debt Management Plan affect my credit status with Experian, Equifax and Callcredit, the three main credit reference agencies
- Will a Debt Management Plan stop all the companies that I owe money to constantly telephoning me and sending me letters?
- Will I receive a regular report to inform me that my debts are actually going down?
- After the Debt Management Plan is set will I receive be able to get any additional help and advice?
- After the Debt Management Plan is set up can I still use a credit card or apply for car finance if I budget for it?
- Once the Debt Management Plan has been set up does it mean that I will have to keep paying interest and bank charges?
- Can I include secured loans in a Debt Management Plan, such as car finance or mortgage?
- Can the companies that I owe money to threaten to take my house or flat once that I am in a Debt Management Plan?
- Can I include all my debts in a Debt Management Plan?
- Debt Management Programme
- DWP Debt Management
- Credit Card Debt Management
- Advanced Debt Management Plans
- About Card Debt Management
- Advanced Debt Management Solutions
- Association of Debt Management
- Best Debt Management
- Budget Right Debt Management
- Christian Debt Management
- Consumer Debt Management
- Debt Management can help you make a clear start with your debts
- Credit Card Management
- Debt Collection Agency Advice
- Debt on Credit Card
- Debt Management Advice
- Debt Management Agencies
- Debt Management Agency
- Debt Management Articles
- Debt Management Associates
- Debt Management Centre
- Debt Management Companies UK
- Debt Management Company
- Debt Management Consultants
- Debt Management Corp
- Debt Management Corporation
- Debt Management advice
- Debt Management Credit advice
- Debt Management Group
IVA's
The IVA Guide
Money Advice Direct has put together an IVA Guide based on the enquiries and questions that we receive at our helpline offices.
In the guide we cover such subjects as IVA Approval, early settlment of your IVA, missed IVA payments, IVA failure, additional debt claims and much more.
[click here for IVA Guide]
What is an IVA?
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Visit Money Advice Direct's Guide to Individual Voluntary Arrangements (IVAs).
[more...]
DANGER
Due to the tremendous demand for debt consolidation services the United Kingdom is now overloaded with debt management companies that contain misleading information. [more...]