Fees

When deciding upon an IVA, debt management plan, or any other form of debt solution it is incredibly important that you fully understand what's involved.

Debt Free Me are a commercial debt management company, which means that although all advice given is completely without charge, we do charge a fee for certain debt solutions. This fee enables us to offer you the best possible service.

What Fees Are Involved?

Dependent upon your individual situation, you may be advised to enter a specific debt solution. If you do, fees may be charged. As a long-standing debt solution provider, we always strive to offer our customers an excellent service, whilst keeping our fees competitive.

Each individual case has different circumstances and creditors for us to deal with, and not everybody's debt management solution will involve the same amount of work. Any costs incurred are paid over a period of time to break up the cost for you.

The vast majority of work and costs involved is in the setting up of the plan and the early negotiations with your creditors, which is why we have a monthly management fee.

Our policy is to commence work on a client's file immediately. Once we receive the client's signed Authority to Act we proceed to contact creditors, regardless of any fees being paid.

We make token payments to the client's creditors from the set-up fees to ensure continuity of payment during the initial set-up period. After this period the client's disposable income is disbursed pro-rata to all creditors.

You will go further into arrears as a result of paying the set-up fees and making token payments. However it is preferable to make these token payments than nothing at all while we contact your creditors.

Set-Up Fees

Unlike many debt solution companies we take a monthly fee of £25, rather than a percentage of your monthly disposable income, this is a set tracking fee and covers ongoing negotiations, all correspondence, all administration costs, and more. We estimate that for an average client we will have sent to them, and their creditors, in a 6 month period, approximately 74 sets of correspondence.

Will It Affect My Credit Rating?

Most debt solutions will affect your credit rating, although if you are struggling with debt then there's a chance that you already have an impaired credit record. By entering into a managed debt solution, like a debt management plan or an IVA, you will be showing your creditors that you are taking a responsible attitude to resolving your financial problems and this could help you in the future.

Debt Management Plan Fees

• Your single monthly payment of £25 covers all our fees, you will never be asked to pay anything more. Some companies charge an annual review fee, we do not do this.

• We will always tell you what fees are involved and how they are calculated before you commit to a debt management plan.

• We will negotiate with your creditors to freeze or reduce interest.

• Our customer care team are always on hand to help if you are struggling.

What Your Fee Gets You

• Administration and set-up of your debt management plan.

• Liaising with your creditors and negotiating a solution.

• Drawing up documentation for your debt management plan.

• Collecting all required paperwork.

• Offering advice and on-going support from our debt management department.

• Annual review to ensure your plan is running smoothly.

• Ongoing negotiations with your creditors to ensure your plan runs smoothly.

IVA Fees

All IVA providers follow the same guidelines, including the debt charities.

IVA fees are not pre-set, they are based upon each individual case.

Assessment Fee?

What do WE charge that isn't below?

The IVA assessment fee is based upon information provided by you. This fee covers all of the preliminary work, including assessing your eligibility for an IVA, discussing the process with you, collecting all required paperwork and passing it on to a leading Insolvency Practitioner. This fee does not go towards your IVA or creditors.

IVA Fees

There are two types of fee involved in an IVA:

• Nominee's Fee

• Superviser's Fee

The Nominee's fee is for setting up the IVA between you and your creditors.

The Superviser's fee covers the ongoing management of your IVA.

What Your Fee Gets You

The fee you pay for your IVA covers the following:

• drafting and preparing your IVA proposal

• holding a creditors meeting and presenting your case

• ongoing support from our IVA department to help you with any questions you may have

• annual reviews of your case to ensure everything is running smoothly

• distributing your payments

• changes to your IVA should your circumstances change

Cooling Off Period/Right to Withdraw

You can withdraw your proposal for a voluntary arrangement at any point up and including the day of your creditor's meeting. Once the arrangement has been approved at the creditor's meeting and you have agreed to be bound by its terms, you have entered formal insolvency proceedings and no cooling off period applies.

Credit Rating

A record of your IVA will be retained by credit reference agencies for a period of 6 years. Your credit rating will be impaired and it may be more difficult to obtain credit in the medium to long term.

Warning

A significant amount of your payments are taken to meet your Insolvency Practitioner's fees, so if your IVA fails you will remain liable for the balance of your debt and the balance of any fees already incurred. It is therefore essential that you maintain the agreed level of monthly payment.