Below is a list of priority debts and outcomes of non-payment.
| Priority Debt | Consequences Of Not Paying |
|---|---|
| Secured Loan | Loss of Home |
| Rent | Loss of Home |
| Mortgage | Loss of Home |
| Electricity / Gas / Housing Fuel | Prepayment Meter / Disconnection |
| Council Tax | Attachment of Earning / Bailiffs / Imprisonment |
| TV Licence | Fine / Imprisonment |
| Child Maintenance | Attachment of Earning / Imprisonment |
| County Court Judgements | Attachment of Earning / Bailiffs / Charging Order |
| Magistrates Fine | Bailiffs / Imprisonment |
| Hire Purchase | Loss of Goods |
| Telephone | Disconnected |
NOTE: Imprisonment only applies if you wilfully refuse to pay.
What Will A Debt Management Plan Achieve For You?
One reduced monthly payment to your creditors.
Telephone calls and letters from your creditors will be much easier to deal with.
Interest charges in most cases are stopped, suspended or reduced to a nominal level.
When your creditors wish to review your payments (usually every three months), your advisor works with them to ensure that you only pay what you can afford.
Peace of mind: you are safe in the knowledge that your financial situation is being managed by a professional and ethical company such as Debt Free Me with a wealth of experience.
Light at the end of the tunnel.
A Word Of Caution
Some companies will claim they do a number of debt solutions for free and charge nothing for their services. You will also come across companies that take a percentage of your monthly MDI for making your payments.
First, nobody does anything for free as we all know and the tendency is that these companies actually act in the best interest of the creditor (to whom you owe the money) and will receive payments from the creditor for achieving set targets.
The companies that take a percentage of your monthly amount may be inclined to push your MDI to an unrealistic amount causing the debt management plan to fail due to a lack of resources.
Although creditors may accept reduced payments, it is important to remember that creditors retain all of their legal rights, and it does not affect the terms and conditions of the agreement, which means they are still entitled to make demands for full payment as well as charge interest and late payment fees. And at any time, they may instigate legal proceedings against you.
