Debt Management Criteria

Debt management programmes deal only with unsecured debts. These debts could be any one of the following: high street credit cards, conventional credit cards, personal bank loans, mobile phone bills, bank overdrafts, unpaid utility bills, and catalogues.

Therefore, secured debts are not covered by our debt management programmes. These debts, which may include mortgages and secured car finance, would be excluded from the debt management programme. Any loan, second charge, conditional sale or lease should be paid as per the original arrangement. Secured debt payments and living expenses are your most important payments, so your creditors will be paid from your surplus income.

It has been found that most creditors are reluctant to make arrangement on recently acquired unsecured debt, typically debt on which fewer than three payments have been made.

What are the criteria for entering into a debt management programme?

• You are finding it difficult to meet your current credit repayments
• Besides making payments on your secured debts, you can afford paying your unsecured creditors at least £100 a month
• You need to have at least three different creditors. These should be three separate companies, as three different financial products from one company would not qualify.
• Unsecured non-priority consumer debts should comprise at least £8,000. There are certain items that may not be included: hire purchase, CSA or maintenance arrears, leases and secured loans. Priority debts, which may include rent and council tax arrears, student loan company payments, are also not included in the figure. And because most car finance loans are secured on the vehicle, you may not include these in a debt management plan.