You may wish to avoid a formal process and to deal with your creditors directly or have an advisor such as the Citizens Advice Bureau, a licensed insolvency practitioner or a debt management company, to do so on your behalf.
Should you wish to speak to a member of our team further about organising an informal arrangement with your creditors then call us today on 01224 625 554.
| Main advantages | Main disadvantages |
|---|---|
| • Can be undertaken by you • There may no charge if arranged by you or with the help of certain money advisors (for example stepchange, citizen’s advice bureau) • Can relieve pressure from creditors • Creates a repayment programme that all parties are content with • May not have an adverse effect on your credit rating | • Creditors do not have to agree • There is no guarantee that creditors will accept your proposals • Interest and charges will continue to accrue unless agreed otherwise • Many advisors and debt management companies will charge a fee for providing help • If your situation changes are you are unable to maintain your instalments, you may have to start all over again • Creditors can continue to take legal action against you |
Informal Arrangement – frequently asked questions
- Can I go to prison for non-payment of a debt?
No, you cannot go to prison for failing to pay a debt. If you are charged and convicted of fraudulent activity then you may receive a jail sentence.
- How much should I offer to pay to my creditors?
Realistically, the smallest amount that can be offered to creditors is £5 per month, however this would most likely mean it may take years to clear your debts and some creditors may not accept these proposals.
- If I organise a debt management plan to deal with my debts, can creditors still add interest and charges to what I owe?
Yes, your creditors are not legally obliged to freeze interest or charges.
