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Debt Management FAQs
What is Debt Management?
How does a debt management program work?
Will the payment remain the same throughout?
How long does a repayment plan last?
How will I know my creditors are being paid?
What happens if a creditor contacts me?
What is my next step?
What
Is Debt Management?
Debt management is a system which decides how much
an individual or family can afford to pay their unsecured creditors.
Your debts are consolidated into one affordable monthly payment.
Levels of payment are agreed with your creditors and paid on your
behalf.
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How does a debt management
program work?
Firstly we must take into account the most important
aspects of your budget - this means your priority expenses, i.e.
your mortgage or rent, your council tax and other household bills.
These priority debts are taken from your income,
leaving what we call your disposable income. This will be an affordable
and realistic amount that is available to pay your unsecured creditors
with. This money is then deposited into The Financial Helpline
LLP Client Account for distribution amongst all your unsecured
creditors on a percentage every month. If your outgoings are currently
more than you can afford or even more than your income, your once
a month payment will be affordable.
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Will The Payment Remain
The Same Throughout?
The payment plan is flexible depending on your disposable
income and current position. Circumstances may change and you
may have to reduce the payments for a time. Or, your financial
position may improve so you can increase the payments to reduce
the outstanding debt faster.
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How Long Does
a Repayment Plan Last?
This depends on the levels of repayment and the
amount of debt owed. However, our service is available to support
you until your debts are paid off. A review will take place every
12 months to see if we can pay any debts off faster on your behalf.
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How Will I Know
My Creditors Are Being Paid?
You will receive a statement of your account which
will be sent on a monthly basis. This statement will show all
monies received from you and how much each creditor is receiving
on your behalf. Furthermore, you will normally continue to receive
statements from your creditors.
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What Happens If a
Creditor Contacts Me?
Simply advise them that we are dealing with your
repayment plan and forward any correspondence to us (keep your
creditor monthly statements). Any letters or calls will usually
cease once your payment plan has been established and accepted.
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What Is My Next Step?
Fill out all paperwork and send it back to us with
copies of all unsecured debt outstanding. Upon receipt of your
paperwork, a member of the Advice Team will call you to discuss
your program in more depth.
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