Why pay fees for a debt management plan? See how much we could save you
A fee charging debt management company is a firm that will charge you for debt advice and debt service. They usually take the first two months’ payments into your plan as upfront costs followed by 15% of your monthly payment plus VAT. The New Protocol launched in February 2013 will mean that the up front fees will be taken over six months. See Debt Management Protocol
There are some good fee charging firms operating in the debt industry and if you are happy with your firm then fine. However there are some shockers out there and we have the following guide to help you spot them, see our 7 point guide to spotting a dodgy debt advice website!
If you are thinking of starting a debt management plan or wish to transfer to a 'non' fee debt management plan and not pay fees then see how much we can save you by using the slide bars on our unique fee saving calculator above.
Page last updated Friday, 20 January 2012
See DebtWizard's letter to the Prime Minister at the bottom of this page
The cost for a consumer to petition their own bankruptcy has increased 37% since June 2010 and now stands at £700 per individual, so a husband and wife, or partners that need to go bankrupt because no other debt resolution is open to them will need to find a staggering £1,400.
For those consumers on certain benefits or a low income the court fee of £175 may be waived but for everyone else the fee is still £525 whilst in Scotland the fee is £100. If you can’t pay the fee you can’t go bankrupt!
I have expressed my concern in the past about these high costs, which in my view prevent thousands of consumers from petitioning their bankruptcy resulting in their number falling recently.
Undue stress and worry
Putting off petitioning through being unable to afford the fees can cause undue stress and worry and leave the consumer at the mercy of debt collectors and bailiffs. This then affects their health, their relationships and their general well being and for some of my clients this has been going on for several years. It is not therefore surprising to hear that sales for depression pills have outstripped those of pain killers for the first time this year.
My letter to the Prime Minister
Earlier this year I wrote to the Prime Minister raising my concerns about this issue and its effect on overstretched consumers. In my letter I suggested three possible ways forward to overcome this problem and I am pleased to report that one of my suggestions, to allow consumers to pay the current petition fees over the three years of their bankruptcy, is now under consideration. The Insolvency Service response was that “The suggestion that someone pays the bankruptcy fees over a period of time strikes me as something that may be interesting to explore and I will pass this on to our Finance Team” and their review of this issue was confirmed in a telephone conversation with them yesterday.
The deputy Prime Minister replied thanking me for information but unfortunately no response from The Labour Party leader, Ed Milliband.
You can read my letter to the PM 'The Prohibitive Cost for Consumers to Petition for Bankruptcy' by clicking on the link below;
DebtWizard Letter to PM re Bankruptcy
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