Creditor relations
At National Money we have combined experience of over 50 years in the creditor industry and we use our experiences to make the most from our creditor relationships for the benefit of our clients who have money problems.
Creditor relationships are important when dealing with debt solutions as a debt management plan is an informal arrangement to which creditors do not have to agree.
Our experience and relationships with creditors are used both to negotiate freezing interest and charges and to put a presentation of your circumstances, your income and outgoings and what you can reasonably afford to pay on a regular basis to your creditors that we know they will accept.
Will my interest and charges stop in a Debt Management Plan?
A Debt Management Plan is an informal arrangement to pay off your unsecured debts at a level you can afford monthly within your financial situation. This means that creditors cannot be forced by law to stop applying the interest and charges that were set out in the original Consumer Credit Agreement you will have signed when taking out the finance; if they chose to, they could continue levying such charges until the debt was fully paid off, although practically this would not make very much sense!
Each creditor has their own policy for dealing with client debts which are not being repaid in accordance with the original agreement; some will immediately stop charging interest etc as soon as they become aware of financial difficulties, but there are others who will insist on levying interest and other fees until the debt is ‘defaulted’. To further complicate matters, other creditors sell off their ‘delinquent’ loans and there is an active market for such debts; some of these debt buyers will hold the debtor to the letter of the original agreement, levying the original interest rate without fail, even though they may have bought these debts at a discounted price.
Whatever the case, it is critical that you seek help from expert, knowledgeable specialists who are familiar with the requirements of each creditor. Having worked in the creditor industry for so long, our directors and team have an extensive understanding of the requirements of creditors which has proved helpful in establishing arrangements for our clients.
In all likelihood, immediate agreement to freezing interest etc is rare, as creditors will wish to see a track record of payments to demonstrate commitment to the proposed arrangement. Creditors are human like the rest of us, and can be quite cynical when considering requests to reduce payments to them; genuine hardship can be overlooked sometimes because of others who simply want to pay less for other reasons.
In terms of arrangements put forward by debt management providers, creditors’ decisions are influenced by:
- How realistic the payment proposals are
- Quality of the information provided in respect of analysis of the client’s monthly income and living costs
- Reasonableness of the monthly ‘essential’ expenditure – on items such as food, travel etc
- Credibility of the debt management provider
Clearly if the debt management provider has a history of putting forward unrealistic proposals which cannot be sustained, or submits poor quality information, the creditor is less likely to accept the proposal, and in such circumstances the opportunity to secure a freezing of interest and other costs is a good deal less.
The team at National Money have a very high success rate arising from good relationships with the creditors.
Call us on 08448 247 260 or ask us any Debt Management questions using the form below:
