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Frequently Asked Questions
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Top 6 FAQ
Will I end up paying for longer?
Yes. Because we negotiate lower monthly repayments on your behalf, your debt will take longer to repay - however, the repayments will be affordable.
Our programme is only offered to clients who, because of their financial circumstances, cannot afford to make the minimum payments required by their creditors each month. Our service allows you to make an affordable payment, every month, towards reducing each of your debts - instead of continuing to struggle, having to miss payments and incurring additional charges.
The programme is focused on you and your ability to pay, and if your circumstances change, then Money Tailor can revise your programme accordingly.
There may be reduced payments to creditors whilst the initial fee is collected
Will creditors accept reduced payment offers?
We have worked tirelessly to build excellent working relationships with creditors. Experience has shown that most creditors welcome a reasonable payment proposal that’s agreeable to both parties.
Whilst we are able to negotiate reduced payment terms and the freezing or reduction of interest and/or charges and fees on your behalf, creditors are not obliged to freeze or reduce interest, charges or fees or to accept reduced repayment arrangements - and unless they do, repaying the same debt over a longer period of time will result in an increase in the total amount you have to repay.
Will creditors still pursue me direct for payments?
Once creditors are informed we are dealing on your behalf many of them will start to communicate directly with us, taking a lot of pressure off you. We will keep you informed of any communication we have with your creditors.
Will a Debt Management Plan affect by Credit Rating?
Because taking out a plan will result in you not making the contractual repayments on your unsecured debts, you should expect that your credit rating will be adversely affected in the short to medium term. However, your credit rating may have already been affected if you have missed or made late payments.
We are committed to being completely clear and open about the charges for our services. There is an initial fee (equivalent to your first 3 monthly payments). This can be paid in one lump sum, or spread over a period of up to 3 months, interest free. With the latter option you will also include a token payment of £5 for each of your creditors so that we can begin to pay them immediately. There is also a flat monthly management fee of either £30 or £35 based on the amount of debts you have included as part of your affordable monthly payment. Please note that any delay in payment of the initial fee means that we cannot begin to make payments to your creditors. Consequently, your creditors will place your accounts into arrears or further into arrears.
The set-up fee includes:
- Compilation of the Draft Programme
- Appointment of a dedicated Personal Finance Manager
- Communication with your creditors either in writing or by telephone
- Preparation of the financial statement
- Calculation and issue of the reduced repayment proposals
As part of our initial consultation with you, we will provide you with an estimate of the likely time you will be on plan. Please note that through regular reviews with your Personal Finance Manager we will continue to ensure the plan is the most appropriate solution.
To view our terms please click here to view our Terms and Conditions page.
Will you deal with all of my Debt?
No. We will deal with all of your unsecured credit and non-priority debts. This includes personal loans, credit cards, overdrafts, catalogue debts, etc.
Other types of debts must be given priority because of the serious consequences of not maintaining regular payments. You must continue to make these payments yourself. Examples include your rent or mortgage, any loan secured against your property, hire purchase agreements, council tax and utilities such as gas, electricity and water.
When we assess your financial situation, we make suitable allowances for you to be able to afford your priority debts and your day-to-day living costs before we calculate how much you can afford to pay towards your other creditors.
Will the Debt Management Plan stop my creditors taking further action?
We cannot guarantee that your creditors will not take further action, including court action to recover debts from you but, if they do, we will help you respond so that any repayment that is required is within your ability to repay. There is a possibility of further charges being incurred as a result of entering into a Debt Management Plan.
What happens if my circumstances change?
Because a Debt Management Plan is an informal arrangement, it is easy to change it as your personal circumstances change, and even to replace it with an alternative arrangement if that becomes more appropriate at a later date.
You are under no obligation to proceed with any of the solutions we advise on. Should you change your mind once a plan has been put into place, you are provided with a cooling off period of 14 days under the Consumer Protection (Distance Selling) Regulations 2000. Please see the debt management terms of business for full details on your right to cancel.
Please note that an IVA is a legally binding arrangement and cannot be cancelled once a meeting of creditors has been accepted. Failure to maintain payments towards your IVA could result in Bankruptcy.
How will it affect my credit rating?
Yes, your credit rating will be affected. Credit reference agencies such as Experian, Equifax and Call Credit maintain records of your credit accounts. Failure to maintain contractual payments towards any debts will result in a default notice being made on your credit file.
These notices will remain on your credit file for 6 years (unless the creditor agrees to remove them prior to this) and may affect your ability to obtain credit.
Will I be charged if I leave the Plan?
No. You can leave the plan at anytime, but we ask you to write to us so we can inform your creditors of your decision.
What is your complaints procedure?
Please view our complaints procedure here
How can I find out more about insolvency?
Find out more about insolvency by clicking here.
Health Warnings
- Conditions Apply, are Subject to Status and Fees are payable.
- The total amount to be repaid may increase if debts are repaid over a longer period.
- Your ability to obtain credit will be affected in the short term and may be affected in the medium to long term.
- Telephone calls may be recorded for training and quality purposes.