Choosing a Debt Management Company

Debt Management Companies (DMCs), like Atlantic, act on behalf of borrowers to help them clear their debts.

They do this by entering into direct negotiations with your creditors in order to re-negotiate the repayment of debts over a longer timeframe at significantly lower repayment amounts usually with interest and charges frozen early in the lifecycle of the Debt Management Plan.

In many instances you may have missed payments to your creditors or be only making minimum payments on your credit card debts, meaning that it may take decades to repay as you are only servicing the interest on the debt. In return for their services the Debt Management Company may be paid a set-up fee and on-going monthly management fees by the borrower.

A Debt Management Company must comply with the Office of Fair Trading's (OFT) Debt Management Guidance, first issued in 2001, and must have a valid Consumer Credit Licence (CCL) for 'debt counselling' and 'debt adjustment'.

Important factors to look out for when selecting a reputable and well established Debt Management Company are:

• They are properly licensed by the OFT

  (see our footer below) beware many websites proclaiming to help you with your debts are just lead generating sites for other companies

• Debt solutions are their core business with a number of years' successful trading history

  beware of companies making ambitious claims when they have only recently started trading

• They offer a full range of Debt Solutions

  including: Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs), Bankruptcy Assistance and Protected Trust Deeds (Scotland)

• The initial debt advice is provided free

  without obligation and available at a time to suit you

• That a thorough review of your financial affairs is undertaken with access to key documentation before a debt solution is discussed.

  Your preference and best interests are a priority - beware companies that offer a quick 'fact find' over the phone, your creditors will see through poorly prepared documentation

• That debt advice can be provided face-to-face or over the telephone

  at a time that is convenient for you and your family

• That you are offered a very personal service throughout the lifetime of your debt solution, not just at the beginning.

  The sustainability of your repayment arrangement is crucial to the success of any debt solution and should be based upon what you can genuinely afford

• That your provider is able to readily quote their success rates

  in negotiating the freezing of interest & charges and the average retention on the respective debt solution - beware of providers that 'guarantee' to get interest & charges frozen or get very high levels of debt written off

• That the Debt Management Company can offer a wide range of payment methods

  and allow you to make one affordable monthly payments to them that is promptly disbursed to your creditors from your client account - Atlantic's branded facility is called 'Single Payment Plan' (SPP)

• That you have a regular review with the Debt Management Company whenever your circumstances meaningfully change

  or at least annually – be aware that dealing with huge amounts of your correspondence and reviews requires a substantial support team, so the provider should be able to quote the number of clients that they looking after, which should be measured in tens of thousands

• That you are kept fully informed of the disbursement of payments to your creditors and any correspondence

  throughout the lifetime of your debt solution - ask how frequently that you will receive a statement of your account and a diary of activity

• That you are allocated a Personal Case Manager

  whose role it is to help you and assist when you experience changes in circumstances, exploiting the strength of a Debt Management Plan – that it is very flexible

• Where circumstance permit, that your Debt Management Company can negotiate full and final settlements with your creditors

  where funds become available to do so. Your provider should be able to demonstrate a strong track record of debt adjustment often writing off in excess of 50% of the remaining balance

• Offering additional services that will assist you in regaining control of your finances

  for example: income optimisation [including benefit entitlements], legal support services (e.g. dealing with CCJs), a new bank account without penalty charges, energy switching services to reduce expenditure and a review of your critical insurances to ensure that you are properly protected

• Atlantic meets these challenges and more.

  Call us on 0845 0 30 30 30 or contact us online.