Credit and Debt Management

This is simply someone with unsecured debt between £2,500 and £15,000 to say credit card firms, personal loans to banks and store cards would seek an advice from a debt management professional adviser to arrange affordable payment plan for all debt outstanding to all creditors. Debt management entities would act in accordance with the consumer credit act legislation applicable are authorised and regulated by the Office of Fair Trading.

Debt Management is an informal agreement with your creditors who may still choose to pursue default actions should you dishonour this informal arrangement, thus not written as formal agreement and also it is not a court arrangement.

It is only a process of rescheduling debt repayment based on your affordability and as debt is now to be repaid at much longer period creditors may choose to increase the total amount to be paid as opportunity cost re interest and other charges.

Unfortunately a number of debt management companies and a number of financial service firms tend to look at what you owe to creditors only but we believe resolution should go far beyond simple consolidation of loans into a single loan for one affordable monthly payment.

It is important to rearrange your debt in a manner prescribed by debt management firms but most importantly one has to consider avoidable processes to mitigate accumulation of debt reoccurring. PMCT Accountants and Consultants is not a debt management entity however, we offer you more than just arranging with your creditors for single monthly payment. Our approach to finance management is in two parts for businesses and individuals. The two parts are:

  • Current financial position that requires management, and
  • What caused current financial status came about and strategies to avoid repeat at future periods.

Besides debt management plans there are other options and these are:

  • Individual Voluntary Arrangement (IVA): This is another option which has the court backing and it is formal legal arrangement allowing you to repay a reduced amount from any surplus monthly income and it is called individual voluntary arrangement (IVA). This arrangement could negatively impact your credit ratings.
  • Debt relief order (DRO): may be an option if you owe less than £15,000, have a low income and very few asYour debts aren’t automatically written off if you haven’t made a payment in six years.sets. To apply for a debt relief order if your own assets or have savings of must not be over £300 and that you must not own a vehicle worth more than £1,000. It is granted by the Insolvency Service and is a cheaper option than going bankrupt and it usually lasts for a period of 12 months. It an order granted through Insolvency Service it implies when issued none of your creditors are in a position able to take any action against you to get their money back and after 12 months there is absolute freedom from all debts listed in the order.
  • Equity release: may be available to a homeowner who is at least 55 years old. This is where equity tied up in your home is released to pay off your debts without the need to move from your home.
  • Bankruptcy: The last option which we refer to ‘throw of dice’ is bankruptcy that allows you get rid of your debt(s) in an instant the court gives search an order as bankruptcy declaration. This would have serious implication for obtaining credit for long periods of time and even restrict you as unqualified individual to hold or undertake certain activities so it should never be undertaken lightly.

Bear in mind that it is not in the best interest of your creditors to involve debt collecting entities or sell your debt to discount houses as such process may not necessary yield guaranteed payment. In many instances creditors would agree to freeze interest and penalty charges as part of agreed repayment arrangement.

We will advice and provide payment plans for you but most importantly agree on a strategy with you which could help reduce possibility of further increasing your indebtedness. Please contact us to discuss your concerns with our specialised team of advisors.

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Proficient Management Consulting and Training (PMCT) specialise in accounting, consulting and training services. We are committed to providing you with an end-to-end integrated services, IT solutions and products that meets personal and businesses unique requirements.

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