Could a Debt Management Plan Help Landlords to Tackle Rent Arrears?

Atlantic Financial Management offers advice to private residential landlords as NLA research reveals 1 in 5 experienced rent arrears in last 3 months

According to the latest data from the National Landlords Association (NLA), 1 in 5 private-residential landlords have had tenants in arrears over the last three months. Leading debt solutions provider, Atlantic Financial Management, believes that for some landlords it may prove worthwhile suggesting their tenants go on a debt management plan to tackle their debts.

"Dealing with early stage rent arrears should be a priority for many private landlords and Residential Letting Agents."

"Dealing with rental arrears is difficult for landlords" explained Kevin Still, Director, Atlantic Financial Management. "They certainly don't want to carry bad arrears - but equally don’t want the cost of having to find new tenants. And that's particularly the case where tenants are not habitual bad payers - they have just been hit by the economic downturn and perhaps faced an unexpected drop in income either through job loss or reduced overtime."

Atlantic's own research indicates that loss of income was the greatest reason for clients coming to the company for help in the last six months. 'Debt spiral' was the second highest reason for needing help – and often that debt spiral will have been caused when an individual tries to juggle various credit payments. The problems start when their income drops, or when they are put under too much pressure by one particular creditor.

"...at Atlantic one of our priorities is to protect a client's home and ensure that a realistic repayment arrangement is negotiated..."

"Dealing with early stage rent arrears should be a priority for many private landlords and Residential Letting Agents" continued Kevin Still. "And one option could be to encourage tenants to look at debt management as a way to get themselves back in control of their finances. The rent and repayment of any arrears would be treated as a priority in a Debt Management Plan, along with council tax, utilities and critical insurance. And that means landlords will get paid before other unsecured debts.

"Indeed, at Atlantic one of our priorities is to protect a client's home and ensure that a realistic repayment arrangement is negotiated to clear rent arrears as part of a holistic debt solution. With the prospects of increased financial pressure in the coming months and years, we therefore believe it makes sense for landlords to work with debt advisors to find the right debt solution for their tenants, rather than just start proceedings to evict."

"...we are able to get creditors to freeze interest and charges on the large majority of our clients' credit agreements."

Atlantic offers a full range of debt solutions, including Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs) and Bankruptcy Assistance. For those clients that elect a DMP as the most appropriate debt solution there is a fast-track service which will help an individual start to tackle their debts within a matter of days. For just £69.50, the expert Atlantic team will review an individual's current financial commitments and income and make recommendations of the best debt solution for their circumstances. This includes dealing immediately with any court actions on the individual's behalf as well as starting negotiations with creditors to freeze interest and charges.

"Our approach is to conduct a thorough review of a client's income and expenditure to ensure that all debts are taken into account and a fair assessment of their living expenses is determined so that they can continue to maintain a reasonable quality of living. Income optimisation to determine a client is claiming all their entitlements is also crucial, as is looking at reducing expenditure, like energy bills and bank charges." concluded Kevin Still.

"As a result, we are able to get creditors to freeze interest and charges on the large majority of our clients' credit agreements. And that is vital to stem the debt problems they are facing."

To find out more about Atlantic Financial Management contact us or call 0845 0 30 30 30