Introducer Today

The Debt Advisor have volunteered to be our resident Debt doctor who can answer all your questions.
 
They have been kind to list a few of the most common questions asked by advisers and welcome any more you wish to ask.
 
They will answer personally or publish them here so you can keep up to date on what is happening in the Industry today.

GENERAL QUESTIONS AND ANSWERS
 
Q. What services do we provide?
A. The Debt Advisor which incorporates The Business Debt Advisor are experts in helping individuals and businesses deal with debt and “get back on their financial feet”.
 
Q. How will your client benefit from using The Debt Advisor?
A. The Debt Advisor’s innovative attitude is recognised and held in high esteem by industry peers, creditors, introducers and clients alike. Clients will benefit by having an insolvency practice dealing with their affairs that has been awarded two prestigious awards ‘Debt Counsellor of the Year’ award for 2008, and “Insolvency Practitioner of the Year 2008” dealing with their affairs.
 
Q. IVA or Debt Management
A. IVA’s really come into their own for higher levels of unsecured debt – over £17,000.

Debt Management is more appropriate for lower levels of debt – over £1,800 but lower than £17,000 or for individuals who can pay their debt back in under 5 years.  Also for individuals who on paper have sufficient equity in their property to clear their debts but can’t remortgage or sell in the current market.

Q. What happens to the property in an IVA?
A. An IVA prevents creditors from taking action against the client and their property. However, before the end of the IVA, it may be necessary for the client to introduce a sum of money into the arrangement in place of a proportion of their share of equity in the property. This is normally done by remortgaging the property. If remortgaging is not possible, the client may be able to extend the arrangement for a further 12 months during which time, the client pays additional contributions in place of equity.
 
Q. Does an IVA include secured debt?
A. No the individual’s income and expenditure need to provide for mortgage and secured loan payments as well as a provision to clear any arrears over a reasonable period of time.

NB - if your client is facing repossession we can help obtain a suspended possession order which allows them to catch up on their arrears over a period.  Once these are clear, the payment to creditors can be increased.

Q. Can the arrangement be brought to an early conclusion?
A. Yes, we can convene a variation meeting to offer a sum of money for full and final settlement of the clients’ obligations under the IVA. Creditors are likely to agree to accept a lump sum to bring the arrangement to an early end, if we can show that the client is paying creditors as much as they can afford. The sum of money could be raised by:
 
1. Remortgaging a property
2. Funds from a friend/relative
3. Cash in policies (subject to getting you expert investment advice)

Q. Debt Management Plans – how do they work?
A. We will go through a financial statement with your client, make provision for priority debts including mortgage/rent, rates and utilities as well as reasonable living costs, which should leave a surplus – “Disposable Income – DI” which is the amount available to pay to creditors each month.

A plan is sent to the creditors showing them how much of the DI they will receive each month calculated as follows:-

The debtor’s surplus is £200 and each creditors gets a percentage of the DI

Barclaycard are owed £1,500 out of £15,000 = 10% of the total debt

They get 10% of the £200 - £20 per month

Q. Will the clients’ creditors/lenders definitely accept the proposed plan?
A. Creditors and lenders do not have to accept our proposals, but most are willing to accept them if we can prove it is beneficial and agreeable to all parties. There is no guarantee that existing or threatened proceedings will be suspended or withdrawn. The client’s creditors may also continue to issue default notices and add additional costs to the debt. The client can rest assured that we will do all we can to ensure their creditors understand the difficulties they are in and ensure the best possible outcome.