Debtors to have their borrowing written off
Private debt advice companies and charities are to be given the power to write off part of an individual`s debts – whether the creditors like it or not.They will also be able to force creditors to accept a schedule of repayments for the remainder of the money owed, regardless of the lenders wishes.
Creditors will not be able to petition for bankruptcy, nor will utilities be allowed to cut off gas or electricity supplies to clients of such companies.
All this is in the Tribunals, Courts and Enforcement Act passed last year, but the Ministry of Justice is consulting before activating the relevant clauses.
One concern is that unscrupulous debt advisors debt advisors could improperly arrange debt write-offs in the return for a cut of the proceeds.
At present, about 70,000 people with heavy borrowings are in 'debt-management plans'. These are arranged by private debt advice firms and charities, which negotiate with lenders to provide a timetable of such repayment.
'Such schemes depend on the voluntary participation of the debtors and creditors and operate without any form of regulation,' said the Justice Ministry.
'There is currently no power to compel creditors to adhere to the terms of the debt repayment plan.'
Under the new law, Justice Secretary Jack Straw will licence approved operators of debt management plans, which will then have the power to force creditors to access the plans that they draw up.
The Justice Ministry added that operators would also be able to compel creditors 'to write off a proportion of the debts where a debtor complies with a plan, but cannot repay the full amount in reasonable time.' These new compulsory debt management plans come alongside other types of 'quickie' insolvency for people who have borrowed too much.
Debt-relief orders (DROs) which can wipe out debts of less than £15,000 without the need to go to court, are due to come into force next April.
A simplified version of Individual Voluntary Arrangements (IVAs), an alternative to bankruptcy, will become available from October, reducing creditors` powers to block an arrangement.
FH Debt Solutions can help you get back in control of your debts. Our highly trained advisors are always happy to help. Our Debt Management Plans & IVAs have already helped thousands of people on their way to becoming debt free.
Call Our Debt Management Helpline Today On 0800 389 6339
FH Debt Solutions are licensed Debt Adjusters and are Data Protection registered. We have partnerships with Licensed Insolvency Practitioners, Credit Brokers and Mortgage Brokers.
There are a large number of companies out there offering services but charging percentage fees on a month by month basis. These fees can be 15% of you overall payment. E.G. payment is £300 their fee is £45. FH Debt Solutions believes in being realistic with charges. We have built up strong relationships with creditors over the years that have helped give our customers a quicker and more effective service. Fees are based on work load, not the amount of debt you owe.
FH Debt Solutions is a partnership. The partners bring many years of experience in the Debt Management field. By working for other Debt Management companies, the partners found gaps in service, reliability, customer satisfaction and overpricing. Using our knowledge and listening to what customers want, FH Debt Solutions was formed.
All customers have an appointed member of staff to deal with their case from start to end. This helps us keep our service high and queries low.
Being in debt is stressful. FH Debt Solutions gives its customers a sympathetic, professional and stress free alternative to their debt problems, and with the office always open, you can call at a time that's convenient to you.
