Debt Solutions

In recent years and for the past last decade, growing level of Debt has become a major concern for many of us as it can affect anyone anywhere. Hence the importance of advice for the debt solution has gained utmost importance. The advice made for any particular debt solution needs to be aligned with your expectations and situation. There are numbers of formal and informal debt solutions available in the UK market depending upon your needs and circumstances. Before you choose any debt solution for yourself, we emphasize you to seek guidance from the attached:

The above can guide you in deciding the best option available for you along with associated risks and advantages. The matrix will provide you with answers of all the immediate questions which can come to mind before you select any debt solution. The best option for you will depend on your own and your family’s circumstances and future Advantages, and on your own preferences. What you decide to do will also depend on how much you owe and how much you can repay from your income or your assets, after paying your own and your family’s basic expenses. Out of all the debt solution options available in market, First Credit Advice Limited only offer the following in-house option, provided if you are satisfied that this is the best option available to you. For all the other options we shall recommend you to the best available solution provider.


NEGOTIATING AGREEMENTS

We renegotiate the loan agreements with your lenders on your favourable terms according to your affordability as per the income and expenditure statement you provide. It consists of:


1.REDUCED MONTHLY PAYMENTS – (From Your Income)

Salient features of negotiating agreements with your lenders to provide you with financial relief include:

  • Rationalisation of rate of Interest for short period
  • Freezing down the interest on the outstanding balance
  • Fixed monthly installment as per the disposable amount
  • Reduced settlement in case of lump sums payment

2.PAYMENTS FROM LUMP SUMS – (You Receive, For Example From An Inheritance Or From Relatives)

We also offer you a Full and Final settlement which is an informal binding arrangement with your creditors which allows you to repay a proportion of your debt in a one-off lump sum payment. Normally the lump sum is raised by remortgaging your property or introducing a lump sum from relatives. For individuals over retirement age, an equity release scheme may be possible although we would recommend you only consider Equity Release Schemes after taking advice from FCA regulated pension advisor.


3.TREATMENT OF TAX DEBTS:

Tax Debts also known as Revenue debts including overpaid benefits, self-assessment tax, VAT and PAYE/NIC generally cannot be included in a DMP although tax debt is an unsecured debt. The numbers of self employed have increased over the years and now account for around 15% of the working population. It is not a surprise therefore that the numbers of individuals struggling with tax debts is increasing as well. Dealing with arrears of tax debts is not easy. HMR & C generally will pursue the strategy that tax debts need to be paid as they fall due and if not you risk getting penalties and will face action. The longer you leave it, the more difficult it is to achieve an agreeable payment plan with HMRC.

The main reason is that it will normally take many years to repay your debts in full using this type of informal debt solution and HMRC will not be prepared to wait that long for their money. First Credit Advice will help you to get an agreement for a separate ‘Time to Pay’ arrangement with HMRC which will get the outstanding tax paid within 12 to 24 months. Once this is in place you can then use whatever disposable income you have left to negotiate with your remaining creditors.


4.MORTGAGE ARREARS

First Credit Advice Limited will assist you with your mortgage arrears by making reduced and affordable repayments towards your outstanding balance of arrears. The repayments will be calculated after generating your realistic budget and disposable income thereafter. The main features of repayment arrangement with your lender consist of;

  • Freezing down interest on the outstanding balance
  • Reversal of the arrear charges and late payment charges
  • Lender not pursuing you for the payment of outstanding debt unless you make a payment break

IT IS VERY IMPORTANT TO KNOW THAT:

  • You will be making the payment to the lenders directly
  • We shall deal with any further correspondence you receive from lender or anyone who is dealing on lender’s behalf.
  • This contract is an open ended contract unless cancelled by you or cancelled by us.

CHARGES:

    Our charges for negotiating agreements with your lenders are subjected into three categories:-

  • For the out standing balance between £500-£1500:

    £100.00 plus VAT per debt.

  • For the out standing balance between £1501-£9,999:

    £200.00 plus VAT per debt.

  • For the out standing balance £10,000 and more:

    £250.00 plus VAT per debt.


PERIODICAL REVIEWS:

We shall conduct periodical reviews of your financial circumstances for the following reasons:

  • To ensure that you receive appropriate advice and your debt solution continue to be suitable to your individual needs.
  • Information provided to lender remains accurate and realistic.

OUR OFFER TO YOU:

  • We offer you a free first bi-annual and annual review with all your creditors.
  • If we have to reschedule or restructure your payment plan during one year time we will not charge you any amount.
  • Restructure of Reschedule your payment plan after first free annual review you will be charged flat £100.00 for every debt.

OUR DEBT SOLUTION METHODOLOGY

We plan to help clients in financial matters through our professional debt solution specialist, to provide all our clients with a results driven service. We intend to provide optimum customer satisfaction by providing them with peace of mind.


1.Eligibility:

As per the your inquiry about the outstanding debt problems First Credit Advice Limited will review your information and assess if the you are eligible for our services. We shall use the in-house questionnaire for accessing the eligibility to obtain our services against your creditors. We will also make a draft income and expenditure statement and the list of creditors.


2.Pre-Contract Information:

We shall send following documents to client initially:


3.Signing Up:

We shall call you at your convenient time to review the debt solution options available over the phone and will discuss in detail the pros and cons of every solution. If you opt and qualify for Debt Management or IVA then will provide you contact information of our affiliated firm ‘The Debt Advisor ltd’. For all the other solutions (CCAO, DRO, Bankruptcy) we shall direct you to the appropriate authority for seeking help. However, if you qualify the eligibility test and want to take on our services for reduced monthly settlement negotiation, we will then send you following documents:

  • Client Care Letter
  • Letter of authority
  • Contract
  • Income and expenditure statement

4.Invoice:

After receiving the signed Contract, Letter of Authority and signed income and expenditure statement we shall send invoice to you.


5.In-House Process:

On receipt of payment we shall start the case officially. We shall finalize your budget statement by carefully considering all the incomes and expenditures with proofs of any item which we consider necessary.


6.Making Offer to Lenders:

We shall make repayment offers to the lenders based on the pro rata distribution of the surplus income.


7.Updates:

Updates will be taken on day to day basis from the lender and will be provided to the client either in written format or over the phone.


8.Annual/Periodical Reviews:

We shall conduct periodical reviews of your financial circumstances at least once annually.



FURTHER INFORMATION ABOUT FREE ADVICE

Other guides can tell help you in dealing with your finances generally, for example the Money Advice website which you can access by following this link:

http://www.moneyadviceservice.org.uk/


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