Date: Tuesday 17th August 2010
Location: Offices of The Debt Adviser Ltd , Manchester
Interviewee: Beverley Budsworth
1. Could you tell us a little about your company?
The Debt Advisor business was established The Debt Advisor in 2000 has always been based in Old Trafford, Manchester. We have an excellent team in place and I am very much involved in all aspects of the business; being the Insolvency Practitioner as well as the Managing Director definitely keeps me on my toes!
2. What geographical area do you cover?
The whole of the UK, Scotland & Northern Ireland
3. Who regulates you? How does that protect your clients?
As a business we have opted for regulation over and beyond that which is required. We are 1 of 10 members of DEMSA who have OFT code 2 approval. In simple terms it means that we have passed an audit and demonstrated that our people are properly trained, our client account is audited annually and we are subject to ongoing monitoring.
4. What actually happens when someone contacts your company to ask for advice or help?
I and our team of advisors deal with all enquiries as soon as they come in. We really do need to understand where a client is up to which means we will spend 40 minutes or more establishing the facts. If we can help with a debt resolution scheme we will explain how our charges work.
As a DEMSA member we are obliged to give best advice. I think it is quite important to properly explain all options so the client is empowered to make their own decisions. IVA and debt management can provide welcome relief from debt but these options need careful consideration.
5. What are the most common concerns of those that contact you?
The level of fees charged or what happens if I lose my job. It is important to be transparent about charges and also cover the different ‘what if’ scenario’s.
6. Debt Management Plans can be confusing. How do you ensure your clients understand the process?
My favourite motto is ‘managing people’s expectations’. This way clients understand exactly what to expect and hopefully we can take their breath away and exceed their expectations. Our consultations are thorough – our advisors have compliance checklists which they must follow which helps us monitor compliance and quality and which should ensure that all issues are covered.
7. In your experience will a Debt Management Plan affect someone professionally?
Entering into a debt management plan should not effect a person’s employment. However, it is an informal arrangement and creditors can take action which could affect a person’s credit rating. If a person’s job requires them to do an annual financial fitness check, then we do need to consider the impact that a debt management plan can have on their employment.
It is rare however, that employers will take a dim view of an employee who is dealing with their debt. Especially in the current environment where on average people have more than £4,478 of consumer debt!
8. How does your fee structure work?
Debt management plans -
Our set up fees are based on a clients disposable income and are usually paid out of the 1 st two months contributions. The minimum is £200 and the maximum is £1,000. Those fees cover the setup of the plan, negotiations with creditors and efforts to secure their agreement to the debt management proposals and also to freeze interest and charges.
We charge an ongoing management fee (min £25 and Max £100) for supervising the plan which includes monthly distributions, communication with creditors and regular reviews.
All fees and charges are discussed in detail and clearly set out in our t’s and c’s.
Our clients pay for a professional, personal service and for employing our skill, expertise and experience of dealing in the finance industry. This ultimately provides our clients with peace of mind that their creditors are being paid regularly at an amount that they can afford.
9. Are Debt Management Plans suitable for everybody?
No, that’s why there are several non-lending solutions available. It is important that we gain a good understanding of a client’s situation before placing them into any kind of arrangement.
10. How often do you recommend other solutions?
Quite often. These can be:-
sensible advice on budgeting
Individual Voluntary Arrangement
Full and final settlements
Or debt management
We do have a rescue culture that is now “fit for purpose” following years of campaigning by myself and other like minded professionals.
11. Do creditors freeze interest and charges?
Some creditors are extremely helpful and do freeze interest and charges. Other creditors may reduce interest and some will continue to charge interest but generally when the debt is referred to third party collection agents, it is much easier to get agreement to freeze interest and charges.
Debt management companies cannot guarantee that they can get all creditors to freeze interest and charges or that they can prevent creditor action.
12. Is legal action ever taken by creditors against your Debt Management clients?
As mentioned above creditors attitudes to debt management vary from extremely co-operative to those who seek to obtain judgments and then charging orders to secure their debt.
3 rd party collection agents generally will accept the payment and freeze action, interest and charges.
It is imperative that if you are looking to set up a debt management plan, you seek advice from properly regulated advisors who will give honest advice and who are knowledgeable about creditors’ attitudes to debt resolution procedures.
13. After a Debt Management Plan has started what ongoing contact is there between you and your clients?
We are in the process of setting up a portal so that clients can regularly check up on the progress of their plan. Clients will be able to check on payments, creditors’ acceptance of their proposals, review balances outstanding to creditors and liaise with their personal administrator.
We also carry out a review of the client’s circumstances every 6 months which includes an assessment as to the continued suitability of the plan.
14. Why did you decide to get involved with this website?
I have campaigned over the past 10 years to make sure non lending solutions are ‘fit for purpose’ and am pleased to be involved in a forum where the public can search or ask their own questions and gain impartial advice. I completely understand that debt is always a difficult issue for someone to come to terms with and contributing to the site means that I can offer my expertise to all those that need it.
If you would like Bev and her team to help you decide how to deal with your debt please use the contact form below or call via the free phone number provided. Bev can also answer your questions on the Debt Management Plan Forum.
Please fill in the form below and Beverley Budsworth will get back to you very shortly.