Debt Management
A debt management plan is an informal agreement between you and your creditors. Under the terms of a debt management plan, you will repay all of your debt over an extended period of time. You will usually make a single monthly payment based on your affordability, that is split between all your creditors on a pro-rata basis. You can contact your creditors directly to arrange this; you do not need to instruct a company to help.
A debt management plan can help if you have a small amount of personal debt and can’t afford the agreed monthly payments. Debt Management Plans are not always appropriate but in some cases they could help reduce pressure temporarily.
Debt Management Plans might not be the best debt solution for you if you are Self-Employed or a Sole Trader. You should make sure you have considered all other debt solutions including a Self-Employed IVA, before proceeding with a debt management plan. Some of the main problems and disadvantages with debt management plans include:
Contact Emma on 01204 255 051 or, email at the above address
Alternatives to Debt Management
If you are Self-Employed or a Sole Trader, it is unlikely that a Debt Management Plan will solve your debt problems. In most cases, if you owe HMRC, Business Rates or Trade Suppliers a debt management plan will not be accepted. Please read more about Self-Employed IVA’s.
Questions about Debt Management
One of the most common alternatives to a debt management plan if you are self-employed is a Self-Employed IVA. You should read more about these before deciding to proceed with a debt management plan.
See further guidance and CVL frequently asked questions.
In theory, there is nothing to stop someone with business debts setting up a debt management plan. In practice, a debt management plan is unlikely to be agreed by your business creditors. For example, HMRC will not usually accept payments through an informal debt management plan. This is normally the same with trade creditors, Business rates, VAT etc. If you only have ‘consumer’ debt such as credit cards, loans and personal overdrafts a debt management plan could be considered.
A debt management company is a business that will help arrange a debt management plan with your creditors, on your behalf. There are many fee charging debt management companies around however, you must remember that they will take their fees directly out of the payments you make each month. This can mean that your debt management plan lasts for a long time.
Anderson Brookes does not administer or manage debts on behalf of clients. If we feel that a debt management plan is the most suitable debt solution for you, we will put you in touch with a non fee-charging organisation.
Yes. Anyone can arrange a debt management plan directly with their creditors.
No. If you enter into a Debt Management Plan you are simply arranging to pay your existing debts back at a rate you can afford. If you choose to instruct a debt management company to help, they will not ‘buy’ the debts, they will collect a monthly payment from you and pay out a portion of this to each creditor. The debt remains with the original creditor.
No. A debt management plan is an informal debt solution that is not legally binding on creditors. This means the creditor can still enforce CCJ’s and instruct bailiffs to remove assets irrespective of you being in a debt management plan.
The debt management plan itself will not show on your credit file however, this does not mean you credit record will not be damaged. Unless you make the full, contractual payments to all your lenders, adverse information will be recorded on your credit file. Under the terms of your debt management plan, it is likely you will be paying less than the contractual payment to each lender; the reason for entering an arrangement is that you were unable to afford those payments. In that case, your credit file is very likely to be damaged.
This depends on several factors;
- the monthly payment you can afford to make
- the amount of debt you have
- whether any fees are deducted from the monthly payments you make
You must remember that under a debt management plan, none of your debt will be written-off. This can mean that the plan continues for many years.
It may be that declaring bankruptcy is the right solution to your debt problems however, you should take professional advice before proceeding with this. There are lots of other personal debt solutions available and it is vital that you have considered all these before going bankrupt.
Once we understand your financial circumstances, we will explain all the advantages, disadvantages and implications of bankruptcy before providing you with a recommendation. At that time, if you still feel bankruptcy is the best option you will understand the full process and know exactly what to expect.
For more information about our debt solutions contact us today.
WHAT OUR CLIENTS SAY
“The service I received from Anderson Brookes was excellent. I’d already made the decision to cease trading but I didn’t know how to deal with my legal responsibilities as a Director. I went through the process of Creditors Voluntary Liquidation (CVL). Anderson Brookes helped me through every stage”.
“Neil helped me through the process of Liquidating my company. Although closing-down the company was quite stressful, it was surprisingly quick and Neil made sure I knew what to expect at each stage. I have recommended other business owners to Anderson Brookes and always received great feedback”.
“Why my company ran into cash-flow difficulties, I was introduced to Neil at Anderson Brookes. We discussed lots of different options but I decided to place the company into Liquidation. The problems are now behind me and I’ve been able to set up a brand new, debt-free company”.
“Anderson Brookes helped me arrange a Business IVA. I was a sole trader and my plumbing business had run into financial problems. I was able to repay my debts through a voluntary arrangement over 5-years. I’m pleased to say; the business has been trading very successfully now for the last few years”.
“Just thought I would let you know that business is going extremely well I have no credit commitments, new car, new van and 2 good holidays a year and I really do owe all of that to you. I really appreciate your help in turning my life around. I would hate to think about where I would be if I hadn’t met you”.
If a County Court Judgment (CCJ) has been registered against you or your business, you will usually have 28 days to pay the debt in full. If you are unable to do this, it is likely the CCJ will be Enforced by the Court; this could mean contact from Bailiffs. Read our CCJ Guide
If you have fallen behind with your payments to HMRC, you may qualify for a “Time to Pay Plan”. Although not well advertised, HMRC will sometimes allow business owners up to 12-months to repay Tax Arrears, including VAT, PAYE, Self-Assessment. HMRC Help Guide
“Can a Bailiff force entry into my home or business premises?” – This is one of the most common questions our Advisers are asked. The Good News is that new rules recently came into effect, giving more protection from unfair behaviour by Bailiffs. Read our Bailiff Help Guide
ADVICE YOU CAN TRUST
The Financial Conduct Authority (FCA). Anderson Brookes Ltd is Authorised and Regulated by the Financial Conduct Authority; our registration number is 669796. You can confirm our details at www.fca.org.uk
Rikki Burton ACA is licensed and regulated to act as an Insolvency Practitioner in the UK by the Institute of Chartered Accountants in England & Wales.
The Association of Business Recovery Professionals. R3 promotes best practice for professionals working with financially troubled individuals and businesses in the UK
The Information Commissioners Office (ICO), promotes data privacy for individuals. Our ICO registration reference numbers are Z5595675 and ZA201949
ANDERSON BROOKES GROUP
Anderson Brookes Insolvency Practitioners Ltd is a limited company registered in England and Wales; the company registration number is 10324159. Registered office, First Floor, Fairclough House, Church Street, Adlington, Chorley PR7 4EX. Rikki Burton ACA is licensed and regulated to act as an Insolvency Practitioner in the UK by the Institute of Chartered Accountants in England & Wales. Our VAT Registration Number is 249 5912 70. Data Protection: our ICO registration reference number is ZA201949.
Anderson Brookes Insolvency Practitioners Ltd operate a complaints procedure. In the first instance, please call 01204 255 051 or email info@andersonbrookes.co.uk to request a copy of the complaints process. If we are unable to deal with your complaint to your satisfaction, your complaint should be made to the Insolvency Complaints Gateway by visiting their website https://www.gov.uk/complain-about-insolvency-practitioner and completing and submitting their online form. Alternatively, you can print the form from their website and send it by post to The Insolvency Service, IP Complaints, 3rd Floor, 1 City Walk, Leeds, LS11 9DA or contact them by telephone on 0300 678 0015 (Monday to Friday 9am – 5pm).