Do you lend me money?

No - we do not make loans to you. The payment plan we advise you to take on is a solution that helps you to spread your repayments as a monthly expense that you will be able to afford. When you make payments into the plan we pay your creditors. We may arrange a loan for you if that is the most effective solution.

What if I have County Court Judgments (CCJs) against me?

CCJs do not bar you from making use of the plan. Payments you are making against current CCJs can be incorporated into the plan. To be certain we must know your existing situation when we carry out a preliminary discussion with you.

Does it matter whether I rent my property or own it?

It makes no difference at all. Even to the extent that you may even be living with your parents. The plan is available for everyone regardless of where they live.

Do I have to be in full time work?

No, but to take out a debt management plan you should have a surplus of income after deducting the money you need to live on.

Does a debt management plan cover all debts?

No, a debt management plan will only cover unsecured debts and arrears (usually referred to as non-priority debts). Priority debts such as fines, council tax arrears, utility bill arrears are not included. You need to make separate arrangements for these so they can be included in your financial statement. Secured debts must also be treated as a priority as you may lose the asset (property, car etc.) against which the debt may be secured.

Will the repayment plan you arrange prevent my creditors taking further action?

This can never be guaranteed but if this happens we will help you by explaining to your creditors your circumstances and try to ensure that enough repayments that are required are within your ability to pay.

What if my creditors continue to pursue me for payments?

In the short term your creditors will continue to take action to recover the money owed to them. Do not ignore them. Deal with them politely and inform them that you have appointed Debt Deliverance to act on your behalf and forward all demand letters to us so we can deal with them for you.

Can I keep one of my credit cards just for emergencies?

No. If you have credit card debt and any of your creditors find out that you are treating another company better than them, they will reject any offers made to them and probably look to collect money through court action. All creditors have to be treated equally.

How long does the plan last?

Now that you will be making reduced payments against your debts it may take more time to clear your debts. If you think that your circumstances will change within a foreseeable time scale it may be a better option to consider a debt management plan rather than an IVA, which commits you to a 5-year payment programme. You may also prefer a debt management programme initially but still retain the option to propose an IVA at any time if your circumstances change or you feel you are not making any progress.

What if my circumstances change?

A Debt Management plan is an informal arrangement so it is easy to change if your financial circumstances get better, or worse. We shall undertake periodic reviews in any case.

Can I cancel the plan?

Yes, at any time. If you decide the debt management plan is unsuitable you have the right to cancel the agreement and be entitled to a full refund of monies paid provided written notice is received within 7 days of making the agreement (the "cooling off" period). For cancellations received after this date Debt Deliverance will be entitled to retain the fees paid, or due to be paid, to compensate for the work carried out on your behalf. Please read our Terms and Conditions.

What if I cancel and you are holding money from me?

All monies held by us that belong to you will be refunded if you cancel before we have distributed it to your creditors at the time of cancellation of your plan.

How do you safeguard my money until it is distributed to my creditors?

All monies we collect from clients to distribute to creditors are held in a separate client account.

What do you charge me for this service?

We do not receive funds from Government nor commissions from lenders so, like the majority of debt management companies, we charge a fee. Our fees are disclosed up front so that you can compare us to other companies and then make an informed decision. Debt Deliverance charges an initial set up fee based on your monthly payment and then 17.5% of future monthly payments to help with the administration costs of maintaining your debt management plan and liaising with your creditors.

Who tells my creditors?

Debt Deliverance will write to your creditors, with a copy of your letter of authority, advising them that we have been retained to carry out a review of your finances and asking for details of your account. This will alert your lenders to the fact that you are trying to deal responsibly with your debt problem.

How much can I afford per month?

With the information you provide, Debt Deliverance will produce a Financial Statement, which will show how much you can afford to pay to your creditors from your disposable income.

Is my credit rating affected?

Yes almost certainly. Some lenders have a policy of automatically issuing a Default Notice as soon as you miss a payment or they are notified of your difficulties. This will affect your chances of obtaining further credit and may possibly incur further costs added to your debts. Debt management information may also affect your credit rating but if you are currently in arrears creditors will likely have already passed such information to the credit reference agencies

What if my account has been passed to debt collectors?

Many lenders are not geared up to dealing with long-term debt and they may refer or 'sell' your account to their debt recovery agents. This is often a more preferable arrangement because these agents have a better understanding of the practical side of debt management and they may be able to agree an arrangement that the lender may not.

Who submits my proposal?

Once you have agreed the proposal with us we will send a copy of the Financial Statement to your creditors. We shall also explain how you got into difficulty, what you have done to resolve it and how you propose to repay your debts from your available surplus income. We shall advise your creditors of the dates on which payments will be made, which we shall agree with you in line with your pay date. We shall ask your creditors to freeze or reduce interest charged to the account so that the repayments you make will reduce the capital balance and pay off the debt sooner.

Will my creditors agree with my proposals?

Not all lenders will agree to your proposal nor may they agree to suspend interest and, if this unhelpful attitude prevails, you may find your term extended and the debt increases. However, whilst we cannot guarantee a favourable outcome, we shall do our best to negotiate with your creditors so that they can appreciate your difficulties and understand how you are doing your best to resolve them. Lenders will always reserve the right to continue with or re-instate legal action but in many cases the proposal and payment plan is often more acceptable to lenders and their agents than going to court. You will, of course, lose the right to continue using the borrowing facility of the lenders you are dealing with and will be expected to return or destroy the cards in your possession.

How do I pay my debt management plan?

Once we have agreed the proposal with you, you simply make one payment per month to Debt Deliverance (Standing Orders are preferred) and we will undertake to pay the proposed pro-rata payment to all your creditors within 5 days of receipt of your cleared funds.

How do I keep track of my plan?

In order that you can keep track of your account we shall send you a regular statement showing monies received from you and the disbursement of funds made on your behalf. As an added safeguard you will also continue to receive statements from your lenders, which you should retain for reference.

What happens if I fail to make payments to the debt management plan?

If you do not maintain payments at the agreed level and on the agreed dates your creditors are likely to withdraw their support for the plan and may commence legal action. Debt Deliverance will cancel the plan with you if you fail to make regular payments to us.

My bank says they will not deal with you and will take me to court if I use you. What do I do?

A creditor cannot refuse payments from a company such as us and then take you to court for non-payment. Some credit companies prefer not to deal with us so they can apply more pressure to you, however you have a legal right to have anyone you wish deal with your finances.

My bank says you have not written to them, but you say you have. Why?

Employees of a creditors collections unit have one job - to try to get you to pay money. Unfortunately, some will do this any way they can. Once they acknowledge we are dealing with the account, they know they have to negotiate through us. If they tell you they have not heard from us then they have more leverage. If they make you think we are not doing our job properly, they will try and convince you to cancel the agreement with us, and then they can use any tactics to get the money from you. If this happens, inform them that Debt Deliverance is dealing with your affairs, contact us immediately and we will then issue a further copy of correspondence to them.

Can I pay off my debts with a reduced lump sum?

Most creditors are unwilling to accept a lump sum settlement of less than the owed amount in the early stages. However, it is common for creditors or their agents to offer reduced settlement figures when you have demonstrated your commitment to repay your debts after a period of time. We can help you with this negotiation.

Is an IVA the right solution for me?

To enter an IVA you should have 'unsecured debts' of £15,000 and more than 4 creditors. A mortgage, second charge loan or car hire purchase agreement are secured debts so you can not use an IVA to pay off secured debts or tangible objects that can be repossessed. There are ways that you could re-mortgage a house or refinance a car.

How much of my debts will be written off?

Nowadays it is becoming more difficult to get lenders to agree to write off more than 55-66% of debts with an IVA, no matter what other debt management companies say in their advertising literature. It may be possible to write off up to seventy five percent, but this is becoming rare.

Is an IVA a one size that fits all?

No, an IVA can be set up on the basis of offering a lump sum payment to creditors as opposed to making monthly payments. Some IVAs can be a mixture of the two depending on your circumstances, a lump sum and monthly payments.

What if I own my own home?

You are likely to be required to release the equity in your home, if there is any there, usually in the last year of the IVA.

What if I have CCJs against me?

Entering an IVA will avoid further recovery action after a creditor has obtained a CCJ against you. CCJs can be incorporated into the IVA.

Do creditors have to accept an IVA?

Once you have decided that an IVA is the right option for you, a draft proposal will be drawn up by a specialist insolvency practitioner for your creditors. He will invite them all to a creditors meeting during which he will negotiate on your behalf with the creditors.

What happens at the creditors' meeting?

Once the negotiations are over the insolvency practitioner will put it to a vote. If 75% of your creditors 'by value' of those who vote agree to the IVA, then the rest are bound by the IVA, even if they voted against it. Sometimes creditors will argue about the terms of the IVA. Some may ask that you make payments over a longer period, or, ask that your assets are used to raise cash to pay for the IVA - this may mean selling or re-mortgaging your home, or selling your car, or any other asset you may have that can be sold to raise cash.

If I enter an IVA what happens next?

Once the IVA is agreed the insolvency practitioner will supervise the IVA and make sure you make the payments. We will also take an interest in your case. An IVA can help you avoid bankruptcy, as long as you stick to the payments that have been agreed. It is important that we know the true extent of your debts. Being completely honest with your advisers is the only way they can do their best for you.

How long does it take to set up an IVA?

It will take about six to eight weeks to set an IVA up for you.

What if a creditor takes further recovery action before the IVA has been approved?

You can apply to the courts for an Interim Order to stop any of your creditors taking further action until the outcome of your creditors meeting becomes known.

What if the IVA is not approved?

Debt Deliverance will discuss an alternative arrangement with you, which may be a debt management plan or bankruptcy. It is usually possible to re-apply for an IVA a year later, so by paying into a debt management plan for a year you may improve your chances of success the second time.

What is bankruptcy?

Bankruptcy is a legal status that usually lasts for a year (see How long does bankruptcy last?) and can be a way of clearing debts you can't pay. When you're bankrupt, your non-essential assets (property and possessions) and excess income are used to pay off your creditors (those you owe money to). At the end of the bankruptcy period, most debts are 'discharged' (cancelled).

How do you become bankrupt?

A court can declare you bankrupt by issuing a 'bankruptcy order' after it's been presented with a 'bankruptcy petition'.

How do I file my own bankruptcy petition?

A form (a debtor's petition) can be downloaded from the Insolvency Service website or obtained from county courts with bankruptcy jurisdiction. When completed the form should be taken to the county court nearest to you that has bankruptcy jurisdiction. A fee of £150 is payable, although this can be waived if you meet specific criteria, when you file the petition. A deposit of £345, for the Official Receiver's work, is also payable at this time. This amount cannot be waived.

Can a creditor make me bankrupt?

Yes - your creditors can present a creditor's petition if you owe them an unsecured debt of over £750. Once bankruptcy proceedings have started, you must co-operate fully even if it's a creditor's petition and you dispute their claim. If possible you should try to reach a settlement before the petition's due to be heard - doing it later can be difficult and expensive.

What are the alternatives to bankruptcy?

Bankruptcy is a serious matter - you'll have to give up possessions of value and the interest in your home. However, you don't have to become bankrupt just because you're in debt. You can try to make arrangements with your creditors instead - including:

• informal agreements - you write to your creditors and try to agree a repayment timetable
• individual voluntary arrangements (IVAs) - an insolvency practitioner helps you negotiate repayment terms
• administration orders - a county court orders you to make payments to the court, which the court then distributes amongst your creditors

Where is a bankruptcy order made?

Bankruptcy petitions are usually presented in the High Court in London or at a county court near where you live or trade (although not all deal with bankruptcy petitions).

Who deals with your bankruptcy?

An Official Receiver or an Insolvency Practitioner.

• Official Receiver

  An Official Receiver is appointed to protect your assets. They act as trustee of your bankruptcy affairs if you have no assets.

• Insolvency practitioner

  If you do have assets, an Insolvency Practitioner will be appointed to act as trustee and sell your assets to pay your creditors.

  Once a bankruptcy order has been made against you, your creditors can no longer pursue you for payment. Payment becomes the responsibility of the trustee.

How will bankruptcy affect me?

• Assets

  Once you're bankrupt, the Official Receiver, or appointed trustee, can sell your assets to pay your creditors. However, certain goods aren't treated as assets for this purpose, for example:

  • equipment you need for your work (eg, tools or vehicles)
  • household items needed by you and your family (eg, clothing, bedding and furniture)
• Earnings

  The Official Receiver can look at your income (taking into account expenses such as your mortgage, rent and household bills) and decide if payments should be made to your creditors.

  You may be asked to sign an 'income payments agreement' to pay fixed monthly instalments from your income for three years.

  If you don't pay (or if you don't sign the agreement voluntarily), the Official Receiver can apply for an income payments order from the court to order you to pay - running for at least three years from the date of the order.

  If your circumstances change, you'll need to tell the Official Receiver, so they can review these arrangements.

• Ongoing commitments

  You'll still have to meet ongoing commitments such as rent or debts incurred after you become bankrupt.

What are my obligations when bankrupt?

You must:

• give the Official Receiver details of your finances, assets and creditors
• look after your assets and hand them over to the Official Receiver with the relevant paperwork, such as bank statements and insurance policies
• tell your trustee (either the Official Receiver or insolvency practitioner) about any new assets or income during your bankruptcy
• stop using credit cards and bank or building society accounts not obtain credit over £500 without telling the creditor that you're bankrupt
• not make payments direct to your creditors (there are exceptions to this, such as mortgage arrears and outstanding child support payments)

You may also have to go to court and explain why you're in debt.

How long does bankruptcy last?

Bankruptcy normally lasts for one year. After this time, you'll be 'discharged' from your bankruptcy regardless of how much you still owe. Your discharge could happen earlier if you co-operate fully with the Official Receiver. However, in a small number of cases and if you've behaved irresponsibly (eg, not cooperating), bankruptcy can last for much more than one year.