Debt Management

A debt management plan is an informal and flexible way of helping you to get back on track with your finances.

A debt management plan involves us working out a budget with you which includes all of your essential household expenses such as your rent, mortgage, utilities and food shopping. The money that is left over will be used to pay the people that you owe money to (your creditors). This is called your ‘disposable income’.

You would pay Angel Advance a fee each month to contact your creditors for you and try to agree a reduced repayment for each debt. Please see our Frequently Asked Questions – What will you charge page for more detail and examples. All of your creditor payments, as well as our fee, is paid out of your disposable income, meaning that you only have to manage a single payment to Angel Advance each month.

During the time that you are on the plan we will ask you not to take out any further credit. ‘Further credit’ includes the continued use of revolving credit facilities such as credit cards, catalogues or store cards. If you do, your creditors are within their rights to refuse a reduced repayment offer and will probably request full contractual payments (i.e. the original amount/rate of payment that you agreed to when you signed the agreement) towards the debt.

Advantages

  • The arrangement with us is flexible and can be changed to accommodate your changing circumstances
  • The creditors may freeze interest and fees when we advise them that you have contacted us for help with your finances
  • Your creditors will usually stop contacting you and deal with us on your behalf
  • You can exit the plan at any time, or change solution if there is another option which is available and suitable for you
  • You will make just one payment to us each month rather than having to manage payments to all of your creditors
  • You will be assigned a dedicated account manager so you have a consistent point of contact
  • We will send you a monthly breakdown of payments received and payments made on your behalf so that you can see how your money has been distributed

Disadvantages

  • You will pay us a fee for our services. There are companies which can do the same job for free. You can get more information at www.moneyadviceservice.org.uk
  • Your creditors do not have to agree to the repayment, or to freeze interest and charges.
  • Your credit rating will usually be impacted because you will be paying reduced amounts to each creditor.

Frequently Asked Questions

Read some debt management frequently asked questions.