What is a Debt Management Plan?
A Debt Management Plan is an informal ‘agreement’ between you and your unsecured creditors’.
It replaces all your current payments (to unsecured creditors’) with one affordable payment.
Whoever would liaise directly with your creditors’ and make the monthly payment to.
Any calls from creditors’ can be referred to whoever.
The level of Debt Management Plan monthly payment is likely to be less than under an IVA – usually £100 is quoted as a minimum monthly payment but this is not a rigid amount.
The amount paid to creditors’ is split proportionally, depending upon the amounts due to each of the creditors’.
There is no set period for the Debt Management Plan to run. It can either run for a few months or it can extend for several years. A Debt Management Plan is really suited for a short term period (say 6 months) and is not appropriate for a long term period (say 5 years).
There is no fixed amount of debt to qualify for a Debt Management Plan – typically this would be at least a total of £3000 with at least 3 creditors’.
The Debt Management Plan has no effect on your property and does not stop any of your creditors’ taken action through the courts to obtain a ‘charging order’ against your property which will effectively secure that debt.
A Debt Management Plan is not a legally binding arrangement and will not prevent any formal action being taken against you by a creditor.
A Debt Management Plan does not need an Insolvency Practitioner to manage the arrangement. Indeed, you can do it yourself but it is more credible to use a professional firm to negotiate with your creditors’.
Griffin & King does not deal directly with this procedure, but if we think this is the right direction for you to take, we will put you in touch with the appropriate organisation to help you.
A Background to Griffin & King & our Managing Director Tim Corfield
Tim has been a chartered accountant for over 30 years, and has spent most of that time advising business people and directors about how to run profitable companies. He has a great insight into how businesses limited or sole traders and the people that run them tick and what they think about. As such, he can understand their business and help to rescue their business when it has financial difficulties.
Do all Insolvency Practitioners Need to be Accountants?
Not all insolvency practitioners have to be accountants, but if they are they’ll have a better insight into how a business runs. They will be able to work better with the directors or business owners to look constructively at the business plan and come up with a viable, realistic plan to take the business forward.
How we Handle Major Creditors on Your Behalf
We are very experienced at dealing with all major creditors including the Inland Revenue, banks, and major suppliers. It is so important that we get involved as early as possible to negotiate with creditors and for them to fully understand what we are proposing.