Fees and Important Information
- What fees are involved? Depending on your circumstances, our expert advisers may recommend that you enter a debt solution - and this will involve paying fees. As one of the UK's longest-established providers of debt solutions, we are committed to providing the best possible customer service at an excellent price.
- Will it affect my credit rating? Your ability to obtain credit will be affected in the short term and might be affected in the medium to long term.
- What if I change my mind? Remember, you are not obliged to enter a solution. If you do, and you change your mind, you have a right to cancel your agreement with us at any time during the first 14 days of its term.
Our fees
- Debt management fees
- Debt Management illustration
- IVA fees
- IVA Fee illustration
- Trust Deed fees
- Trust Deed fee illustration
- Bankruptcy assisstance fees
- Full and Final Settlement (or Short Settlement Offer) fees
Debt Management Plans
- Fees and costs:
"Fees" means Set Up Fees, Processing Fee and Monthly Fees.
"Financial Statement" means a breakdown of your income and expenditure on a monthly basis.
"Set Up Fee" means the first two payments which is made by You to Us, and which is not used to pay your Creditors.
Your "Set Up Fee" will cover the work that goes into setting up a debt management plan. That involves: Reviewing your draft payment programme,
Calculating the reduced repayment proposals, Preparing your financial statement and Talking to your creditors to renegotiating your monthly debt payments.
"Letter of Authority" means the form enclosed with the brochure which We ask You to sign to give Us authority to contact your Creditors and act on your behalf.
"Monthly Fee" means the Monthly Fee payable for our Debt Management Plan. This amount is equal to 17.5% of your Monthly Payment. This is subject to a minimum of £39.95.
"Processing Fee" means the £70 processing fee which is included in your first payment.
"Monthly Payments" means the total amount which is paid every month by You to Us throughout the Debt Management Plan. Apart from your first two Monthly Payments which are the Set Up Fee, this is made up of the Monthly Repayment to be made to your Creditors, and our Monthly Fee as agreed with You.
"Monthly Repayments" means the share of the Monthly Payment to be paid by Us on your behalf to your Creditors. "You" means You the person entering this agreement of the Debt Management Plan.
"Us and We" means Debt Advisory Line, whose registered address is Debt Advisory Line, 1C, Riparian Way, The Crossings Business Park, Cross Hills, BD20 7AA, registration number: 07067381 or anyone to whom We transfer our rights and obligations to whilst in this agreement.
- Effect on Credit Rating:
Your ability to obtain credit will be affected in the short term and might be affected in the medium to long term.
- Cooling Off Period:
You have the right to cancel Your agreement at any time during the first 14 Days of the term. 'Days' here include Saturdays, Sundays and public holidays. This can be done by writing into Us at the address shown on the 'contact us' page of this web site or by telephoning Us on 0800 157 7254. Any fees or monies paid to Us will be refunded.
Debt Management illustration
James is a single adult that like a lot of people has been affected badly by the ‘credit crunch’ by both losing income and also the rising prices. He started getting trapped in a downward spiral by using credit to pay the minimum payment on other credit he had.
Before Debt Management Plan
- James owed money to 4 different debts, see the figures below:
- Buchanan Clark & Wells – £734.62 with a minimum payment of £50
- Lloyds TSB (Loan) – £625.13 with a minimum payment of £183
- Lloyds TSB (Credit Card) – £1568.23 with a minimum payment of £80
- Lloyds TSB (Overdraft) – £4697.35 with a minimum payment of £179
His total debt was £7,625.33, he was trying to pay a minimum of £492 per month and even at this rate it would take him around 14 years to clear his debt.
Unfortunately, he was regularly unable to afford to pay the minimum meaning that he missed payments and was charged for this, at up to £30 a time, this was increasing his debt each month rather than allowing him to reduce it.
During Debt Management Plan
After contacting us, we assessed his disposable income (DI) at £222 per month, this is what he pays each month into the plan, he is able to afford this as it is based on his circumstances, not what he owes.
- Buchanan Clark & Wells are paid £19.34 based on 10% of total debt
- Lloyds TSB (Loan) are paid £18.28 based on 8% of total debt
- Lloyds TSB (Credit Card) are paid £38.68 based on 20% of total debt
- Lloyds TSB (Overdraft) are paid £106.85 based on 62% of total debt
- Our monthly management fee is £39.95
- Total payable - £9,764.52
- Total Fees - £2,139.19
Additionally, as we were able to freeze the interest and charges with all lenders, the amounts that are paid are paid directly off what he owes. In this case we were also able to reduce the term to 3 years 8 months.
Individual Voluntary Arrangements
IVA Fees & Key Information
Individual Voluntary Arrangement (IVA) is a specialist service provided by our sister company Mitchell Farrar Insolvency Practitioners LLP.
For Debt Advisory Line to provide the IVA Service there will be an Administration and Set up Fee. The Administration fee is £70 and is to enable us to prepare and issue all documentation required to start the IVA process. The set fee is calculated from the financial information provided to us in the application process and is broadly equivalent to the first three months payments into the IVA. It will be used to cover our costs in collecting and reviewing your documentation and for our professional services in liaising with your creditors and for passing your case to the Insolvency Practitioner. The Administration and Set Up Payments are retained by us and will not be allocated towards your IVA or paid to your Creditors.
A copy of our IVA Service Terms of Business can be viewed here http://www.debtadvisoryline.co.uk/client-services/downloads
We will provide the IVA Service with reasonable care and skill, but we cannot guarantee the result of the IVA Service or guarantee that your IVA proposal, as drafted by the Insolvency Practitioner (as relevant) will be accepted by your creditors. For an IVA to be approved and interest and charges to be frozen it needs to be accepted by 75% of the creditors (by value).
Once your case is passed across to the Insolvency Practitioner all the costs associated with your IVA (as relevant) are included in the payments you make in to it. You will be informed separately by a Letter of Engagement from the Insolvency Practitioner of the proposed fees, tailored to your personal circumstances before you have to commit to an IVA. Fees incurred for Individual Voluntary Arrangements are variable dependent upon the monthly contribution to the arrangement and the agreement that is reached with your creditors. Fees are made up of Nominees fees relating to assistance given to prepare your proposal and Supervisor fees which relate to the ongoing monitoring of your IVA. Fees are included as part of your monthly contribution.
Although you may become debt free upon successful completion of the IVA, a record of your IVA will be held on your credit file for up to six years, which will affect your credit rating and your ability to obtain credit in the future. Once an IVA is approved it is listed publicly on the Individual Insolvency Register. Homeowners may be required to re-mortgage after 4 years and release available equity to pay off some or all of the debt. Alternative solutions may be offered.
You must continue to make payments in full towards any rent or mortgage, hire purchase agreements, any loan secured against property, council tax and utilities such as gas, electricity and water.
However, your Insolvency Practitioner will make suitable allowances for you to be able to afford your priority debts and your day-to-day living costs before they calculate how much you can afford to pay towards your other creditors. Only unsecured debts included within the IVA may be written off at the end of the period and those not included, such as secured debts, Government fines and child support payments will remain.
In line with the Consumer Protection (Distance Selling) Regulations 2000 you may cancel the IVA Service at any time. You will have a cooling off period of seven working days from the date the IVA Service commences, during which you may cancel in writing and receive a refund of the administration payment paid. Please note that Individual Voluntary Arrangements are legally binding arrangements and do not have a cooling off period. If an IVA fails you will be liable for the balance of the debt and fees and this could lead to bankruptcy.
Initial advice will be offered to decide which the best debt solution is. A fee will become payable once you have formally requested the Insolvency Practitioner to act as your nominee in respect of any Individual Voluntary Arrangement (IVA).
IVA Fee illustration
A typical breakdown of payments and fees on a MFIP IVA are:
| Nominee's fee | £1,000 |
| Supervisor's fee | £1,938 |
| Supervisor's costs | £236 |
| Typical monthly repayments (x 60 months) | £200 |
| Total paid by borrower (inc above fees) | £12,000 |
| Total unsecured debt written off on completion | £13,000 (52%) |
This example is based on a typical client - a consumer with approximately £25,000 of unsecured debts who completes an IVA lasting 5 years and has no equity in a home.
Nominee's fee
This will include:
- Drawing up your proposal (what you will pay, what creditor's will receive etc)
- Liaising with your creditors
- Dealing with any issues that arise on a daily basis
- Holding your creditor meeting
Depending on the terms of your IVA, your first few monthly payments will go towards paying the nominee's fee. The nominee fee will be paid before your creditors receive any of the money paid into your IVA. This means your accounts could go into arrears, or further into arrears at the start of your IVA.
Supervisor's fees
These will take up a percentage of your monthly contribution and will not be deducted until your nominee's fee has been paid. The amount of fees paid will be according to the terms of your IVA proposal.
The supervisor's work includes:
- Reporting the results of the creditor meeting to you and your creditors
- Maintain your IVA and deal with any issues which may arise
- Carry out regular reviews of you IVA
- Prepare and issue annual reports to creditors
- Arrange IVA variation meeting should there be a change in your circumstances
- Provide you with ongoing support and advice where necessary
It is vitally important that you keep up your monthly contributions in your IVA. If you fail to maintain payments to your creditors then your IVA will be in breach and could fail. This could leave you worse off and you will be liable for all outstanding balances and any costs incurred. If a home owner, your property may also be at risk.
Effect on Credit Rating
Unpaid debts affect your credit worthiness. It is usually a condition of your IVA that you must not obtain credit any greater than £500 during the course of the IVA. Credit may be allowed for funding public utilities and to re-finance a 'balloon' payment at the end of a motor vehicle HP agreement. Any credit over £500 needs the written consent of the supervisor. Should credit be over £500 and approval not given, then this could constitute a default of your IVA. If your IVA is successfully concluded this will be recorded on any credit report and may be more favourable from the point of view of any future credit provider.
Trust Deed (Scotland)
- Fees are payable if a Trust Deed is taken.
- Our Trust Deed partner will be chosen for you from a panel of selected members.
For Debt Advisory Line to provide the Trust Deed Service there will be an Administration and Set up Fee. The Administration fee is £70 and is to enable us to prepare and issue all documentation required to start the process. The set fee is calculated from the financial information provided to us in the application process and is broadly equivalent to the first three months payments into the Trust Deed. It will be used to cover our costs in collecting and reviewing your documentation and for our professional services in liaising with your creditors and for passing your case to the Insolvency Practitioner. The Administration and Set Up Payments are retained by us and will not be allocated towards your Trust Deed or paid to your Creditors.
- Fees and costs:
"Fees" means:
-
Set Up Fees for the initial preparation of your Trust Deed. This is the first three payments which are made by You to Us. This is not paid to your creditors. Your "Set up Fee" will cover the work that goes into collating all information from your creditors and preparing your file for submission to the Insolvency practitioner. "Processing Fee" means the £70 processing fee which is included in your first payment.
Trust Deed fee illustration
Below is an illustration of the payments and fees on a typical client's Trust Deed.
A breakdown of typical payments and fees on a Trust Deed:
| Typical monthly payments (x36 months) | £304 |
| Fee element included in monthly payment (x36 months) | £205.3 |
| Additional Contributions at the end of Trust Deed: | |
| Realisation of assets after 3 years (house) | £500 |
| Depreciated value of car after 3 years | £150 |
|
Total repaid by individual (including fees above) |
£12,959 |
| Total unsecured debt written off at completion | £34,555 (82%) |
The example is based on a consumer with approximately £42,000 of unsecured debts, a homeowner with £6,283 Equity in the property and a car worth £4000, who completes a Trust Deed lasting 3 years.
For a more detailed breakdown, speak to our experts on 0800 157 7254.
Throughout your Trust Deed (which will probably last for 3 years), you will pay a flat fee every month.
The fee will be taken out of your monthly payments - it won't affect the amount you actually pay every month.
- The size of your monthly payment will depend on the value of your assets and on how much you can afford to pay per month once you've accounted for all your essential expenditure (rent/mortgage, food costs, heating and lighting, and so on).
- The size of your monthly fee will be determined before your Trust Deed even starts, when your IP draws up your Trust Deed proposal. This is the document which details the proposed terms of your Trust Deed - unless a certain number of your creditors object to the terms, your Trust Deed will become protected by law.
Your monthly payments will be stored in a 'creditors pot' - once the flat fee has been deducted from this pot, your creditors will receive their payment. (The timing of this deduction will vary from case to case.)
The fee will cover the costs involved in setting up your Trust Deed. It'll also pay for the ongoing supervision and maintenance of your Trust Deed right up to the day it finishes:
- You'll have a Relationship Manager overseeing the day-to-day running of your Trust Deed, as well as providing help and advice and tackling any issues that may come up.
- And your IP will be there to help if necessary. For example: if your income drops (or your essential costs rise) and this means you can no longer afford your payments, your IP may be able to arrange a Trust Deed variation (a legally binding change to the terms that takes your new circumstances into account).
- Failure: It is essential that you make your monthly payments to your Trust Deed, or it could fail making you worse off- in which case you'd be liable for the remaining balance and any costs already incurred.
- However, you may be permitted a small 'break' from your payments if, for example, you're facing short-term problems (such as dealing with unexpected costs) that significantly reduce your disposable income.
Call Charges
Calls from a BT land line are free, however, calls from non-BT land lines may vary. Calls from mobiles will be charged, as such it may be cheaper to dial 0161 429 3823 from a mobile phone.
To arrange a FREE callback, please complete the debt test form on the right of the page
Bankruptcy charges
Once we have provided the relevant petitions, you should then take your completed forms to your nearest county court. The following fees will be payable to the court and for our assistance.
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A £175 court fee, payable on the day of the hearing**
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Deposit of £525 for the official receiver’s work - which must be paid.
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Our bankruptcy assistance fee is £495 +Vat per person
Additional information
** In some circumstances the Court may waive this fee; for example, if you are on Income Support. Court staff will be able to advise you whether you qualify for a reduction or are exempt from paying the fee.
Fees should be paid in cash, postal orders, or by a building society, bank or solicitor’s cheque. Cheques should be made payable to H M Paymaster General. Personal cheques will not be accepted.
Full and Final Settlement (or Short Settlement Offer) fees
We require a deposit of £150.00 and this will be deducted from the final Total Fee. This deposit is none refundable due to the amount of work that is carried out on your behalf.
Total Fee as mentioned above is calculated at 50% of any reductions made.