There are several key stages to effectively implement and manage debt management services. Each is very important on its own and as part of the overall goal to deal with the debt problem.
- The Advice Process. Other better debt solution options could exist. Anyone considering Debt Management Plan services should ensure that they get information on all of their options so that they can make informed decisions. Some bad debt advice companies provide no information on solutions that they do not commercially offer; for this reason taking a range of advice can be advisable.
- Paperwork. You will need to sign and return documents such as a “letter of authority” which enables the debt management service company to work with your creditors. You should also receive the terms and conditions of the arrangement and details of how to set-up the monthly payment. Finally you will need to confirm the accuracy of your income/expenditure statement and provide the details of your creditors. We suggest that no payment should be made for Debt Management Plan services until you are happy with all of the above.
- Repayment Proposals. Provided that they have full up to date creditor details and balances, the Debt Management Plans company will write to your lenders with full details of your current financial position. This presents your financial picture to your creditors and explains why and how you are seeking to repay your creditors at a fair and reasonable rate via the debt management service.
- Creditor Contact. You can inform telephone callers that you have nominated a debt advice representative to deal with your debts and that further contact should now be with your Debt Management Plans company. You may also forward any letters received to your debt management services company for them to deal with.
- Feedback. As your debt management services company receives responses from your creditors they should share information with you. This keeps you up to date with the progress being made and any matters that will still need to be dealt with.
- Proactive Chasing. Not all creditors respond to debt management proposals within a realistic timeframe. Some (but sadly not all) companies offering Debt Management Plan services will “chase” any company that has not responded by telephone to gain an understanding of their position. This is part of the services offered by some companies and simply too much work for others with lower standards.
- Creditor Payments. Each month your Debt Management Plan company will receive your payment. The company should distribute your payment to your creditors within five working days of receipt of your cleared funds. Not all companies offering Debt Management Plan services meet this requirement; we encourage that you check this with any company prior to signing up to their debt management services.
- Arrangement Reviews. Behind the scenes creditors will regularly contact your Debt Management Plan company for updates. They often offer arrangements for three, six, or twelve months. Much of a Debt Management Plan company’s services should be maintaining these arrangements when they expire. Some firms neglect this side of their client-care arrangements; once again a careful choice of Debt Management service provider is very important.
- Client Reviews. Periodically the company offering Debt Management Plan services should contact you to check whether your circumstances have changed. This allows them to ensure that any arrangement remains sustainable for you and fair for your creditors. Importantly it also allows them to advise you of better alternatives or services should they have become available for you.