Important Information
General:
What happens if I decide that I don’t want to go ahead?
If you deem that the programme is not benefiting you in any way, you are entitled to cancel at any time giving us notice. If the initial fee has been received, we will only refund this if the programme has been cancelled in writing within 21 days since receipt of this money and this period will be a cooling off time to reconsider. If you wish to cancel your programme but the monthly payment to your creditors has already been made we will be unable to refund any monies to you. You may cancel the programme at any time and be entitled to a refund of any monies held by us that have not yet been sent to your creditors in the form of a payment, minus the monthly management fee, which will be retained by us for work undertaken on your behalf. You may cancel the programme at any time by giving notice in writing to us. Our authority to deal with your creditors will be rescinded. Your creditors may revert back to the original terms of your contract with them.
Will my credit rating be affected?
Your credit file will hold a record of your agreement with for a period of up to 6 years and this may affect your ability to get credit in future.
Are creditors obliged to freeze interest and charges?
Creditors will usually agree to freeze interest and charges, but are not obliged to do so. If your creditors do not freeze interest or charges this will lead to an increase in the period and amount being repaid.
What are your telephone call charges?
Calls made to our 0800 number from a BT landline are free. However, please note that calls from non BT land lines may vary. Telephone calls from mobiles phones will be charged as per your operator’s tariff. Therefore, it could be be cheaper to dial our landline number from a mobile phone which is 01889 503080
We also offer a free call-back service. To arrange a call-back, simply complete the ’call back’ form at the top of each page on this website.
Insolvency Guide
The Insolvency Service has a guide called In Debt? Dealing With Your Creditors which you can download in PDF format by clicking here.
It is important to note that if an IVA is not maintained it could lead to bankruptcy.
Debt Management Fees:
Management Fees
Up to 4 creditors = £25
5-6 creditors = £30
7-8 creditors = £35
9-10 creditors = £40
11-15 creditors = £45
16-20 creditors = £50
Set-Up Fee
Equivalent to first month’s payment .
The maximum set-up fee is £300 even if the client is paying £500 to their creditors we do not expect the client to pay more than the maximum figure of £300.
When entering into a Debt Management Plan with FH Debt Solutions., no client will pay the above fee upfront.
We start working on behalf of the client immediately, writing to their creditors before even the first monthly payment is made.
All monthly payments are made by standing order mandate and on rare occasions some clients will pay directly into our bank account, advising our company by telephone that they have made a payment.
FH Debt Solutions. does not accept credit card payments. All our clients are advised to open a basic bank account.
What you get as part of our fees
The setup fee will cover the work involved in setting up the Debt Management Plan, as follows:
- Reviewing your draft payment programme
- Calculating the reduced repayment proposals
- Preparing your personal financial statement
- Liaising with your creditors and renegotiating your monthly payments on your behalf
This fee does not contribute towards your debts, so you will enter further into arrears during the first month. However, please do not be concerned as you will start repaying your unsecured debts on next payment.
There is also a monthly management fee for ongoing maintenance of your debt management plan and includes the following:
- Communicating with your creditors via letters or phone.
- Making the payments to your creditors
- Production of monthly detailed payment statement
- Review of your personal circumstances every six months
Debt Management Illustrated Example
Jane works 20 hours per week in a supermarket. Before getting this job she was temporarily unemployed and during this period built up debt on credit cards.
Before her Debt Management Plan
Jane owed money to 3 different lenders on credit cards and the figures were as follows:
MBNA – £3700 with a minimum monthly payment of £30
RBS – £7400 with a minimum monthly payment of £60
Lloyds TSB – £7400 with a minimum monthly payment of £60
Her total debt was £18,500 and she was struggling to meet the monthly minimum payment of £150. The problem was that even if she could make the minimum payment each month, it would take her many years to pay off her credit card debts.
After some other unexpected bills, she was often unable to afford to pay the minimum payment each month. This resulted in missed payments and also late payment penalties of £20 - £30 each time. This meant that, rather than decreasing her debt she was actually increasing it.
Worried about her increasing debts, Jane decided to contact FH Debt Solutions for advice. We looked at her situation and talked her through the options available to her and recommended a Debt Management Plan.
We assessed her disposable income at £150 per month and this is what she paid each month into the Debt management Plan each month. Jane is able to afford this as it is calculated on her circumstances rather than what she owes to her creditors.
MBNA is paid £25 based on 20% of total debt
RBS is paid £50 based on 40% of total debt
Lloyds is paid £50 based on 40% of total debt
Our Fees are £25
Furthermore, we were able to freeze the interest and other charges with each credit card lender. This has the advantage that the amounts that are paid to the lenders are paid directly off her debt. In this scenario it was possible to reduce the time taken to clear the debts to 148 months.
IVA Fees:
The fees for Individual Voluntary Arrangements (IVA) are dependent upon the monthly contribution to it and the agreement with your creditors. Fees are comprised of Nominees fees in connection with help given in preparation of your proposal and Supervisor fees for the periodic monitoring of your IVA. Fees are already included as part of your monthly contribution. The amount of fees and the payment method are approved by your creditors at the outset of the arrangement.
Nominees Fees
A fixed fee that will cover the work involved in setting up your IVA:
Putting together the IVA proposal:
A document which needs to be approved by sufficient creditors before your IVA can start. It defines the proposed terms of the IVA: how much you’d pay, what each creditor would receive, etc.
Arranging the creditors meeting:
A meeting where your creditors will approve or reject your IVA proposal (or request changes to it).
If any creditors request changes to the IVA proposal then your Insolvency Practitioner will give you advice about whether you should accept the changes or suggest alternatives.
The first few monthly payments that you make will usually go towards paying the nominee’s fees before your creditors receive anything. Therefore, your account will go into further arrears because your first few monthly payments will not go to your creditors.
Supervisors Fees
This will cover the periodic supervision of your IVA for the length of the arrangement (say 5 years).
Your Relationship Manager will deal with any issues that come up on a regular basis. This is to ensure that your IVA runs according to plan.
Your Insolvency Practitioner (IP) will carry out regular periodic reviews of your IVA and deal with any more serious issues that occur. Your circumstances could change and you may need your IP to arrange an IVA variation. This is a legally binding change to the terms of your IVA.
The nominee’s fee is paid first and then a percentage of each monthly payment is taken as the supervisor’s fees.
Important Note: It is very important that the monthly payments are met in an IVA. If you do not keep up with the payments this could mean that your IVA may fail and leave you liable for the remaining balance and any costs.
Individual Voluntary Arrangement (IVA) Example
Here's an example of the fees and payments on a typical IVA:
As previously discussed, there are Nominees fees and Supervisors fees in an IVA.
Based on unsecured debts of £35,000
Based on a Monthly contributions of £350
Total paid over 60 months £21,000
Typical Nominee's Fee agreed by creditors: £1,500 (plus VAT)
Typical Supervisor's Fee agreed: £2,900 (plus VAT)
Disbursements incurred by Nominee and Supervisor: £200
Pence in the £1 received by creditors: 45p in the £1
Note: It is essential that you keep up with your agreed monthly payments into your IVA. If at any point during the term of your IVA you feel you can no longer afford the payments agreed, you must contact your IP or their staff to discuss.
Contacting us to discuss any payment difficulties you are experiencing or changes in circumstances is essential, IVAs do provide an element of flexibility, you may be allowed to payment break if you come up against unexpected costs (such as essential home repairs), or the IP may be able to request that creditors agree to amended terms that suit your change of circumstances.
If you fail to keep up with your agreed payments and fail to contact your IP to discuss, your IVA may fail, leaving you liable for payment of your unsecured debts at their original contractual payment level and in some cases liable for the payment of the IVA fees in addition.
