Debt Management Plan
A Debt Management Plan (DMP) is a way of paying back your debts at a rate you can manage rather than the amount that the creditors demand. Usually you have much of your interest and fees frozen, and you only have one monthly payment to make. Also, your assets are not affected. A DMP is not legally binding so you can opt out of it at any point.
However, your creditors are also free to review the arrangement as often as they wish and to charge interest and fees once again. No debt is written off via a DMP and there are no definitive end dates. If you are concerned about getting legal protection from your creditors, it may be wise to consider another solution such as the Debt Arrangement Scheme, a Scottish Trust Deed, Sequestration or an Individual Voluntary Arrangement. If you are a Scottish resident it would be highly unlikely for you to choose to do a DMP instead of DAS, however, if you are based in England, Wales or Northern Ireland then a DMP may be a viable solution. If you would like further information on DMP’s pleasefill in our qualification form in order to contact one of our advisers
Full and Final Settlement
A full and final settlement offer involves making a one-off lump sum payment to your creditors, in return for having the remainder of your debt written off. This type of offer is a suitable solution for managing your debts only if you have access to a lump sum of money. The lump sum could come from your parents or any other willing person, redundancy funds, inheritance, the sale of any assets or any other appropriate source. Please contact one of our advisers via our qualification form should you like further information on making a full and final settlement offer.
This solution works very much like a Debt Management Plan but does not involve another organisation acting on your behalf. You would contact your creditor(s) and come to an informal arrangement with them which would involve repaying your debt at an amount and frequency your creditor(s) are happy with. To do this you must be prepared to deal directly with your creditor(s) as it would be your responsibility to implement and ensure you fulfil the terms of the arrangement. Please contact one of our advisers via our qualification form should you like further information on entering into an informal negotiation with your creditors.
This solution involves contacting your creditors to request that they write-off all of the debt that you owe to them. It is likely that this will work in specific circumstances only, such as, when an individual suffers from a long term illness and has no prospect of returning to employment. Please contact one of our advisers via our qualification form should you like further information on making a request to creditor(s) to write-off your debt.
This solution involves borrowing a large amount of money from one lender to pay off all existing debts. This is a risky solution and should be considered very carefully before proceeding. It can often be the case that the large loan repayment is unaffordable and/or the individual continues using other forms of credit, therefore, worsening their situation instead of helping solve their debt problems. Please contact one of our advisers via our qualification form if you are considering this option.
Re-mortgage/Secured loan/Equity release
These solutions are only applicable to homeowners and involve borrowing against the value of your home. Often this can be done to repay debts in a similar way to debt consolidation. You should consider your circumstances carefully before proceeding with one of these options and should seek independent financial advice from a suitably qualified financial adviser. Our debt advisers at SFA are not qualified to give you mortgage related advice but we can put you in contact with a qualified financial adviser who will be able to give you more advice. Please contact one of our advisers via our qualification form it you are considering these options.
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