Agree Reduced Payments with your Creditors
After you have forwarded your reduced payment proposal and financial statement to each of your creditors you then need to agree the payment amount you have offered with them. It is important to understand that they do not have to agree with the amount you have proposed. However as long as you offer each as much as you can afford based on your income and reasonable living expenses budget there is every chance that they will accept your offer.
How long will it take for creditors to agree your payment offer?
There is no hard and fast rule about how long it will take for your creditors to respond to your debt repayment offers and agree them. Some might accept straight away. Others might take a few weeks to respond to you. This will largely depend on how busy they are.
If you have not received a response from a particular creditor after 4 weeks you should give them a call to find out the status of your file. It is possible that they will claim your proposal was never received. If this is the case you need to be prepared to resend it. You should confirm whether there is anyone in particular it should be addressed to and use a recorded delivery service. Alternatively you can offer to e-mail your proposal to the appropriate person.
DM4U Tip: Whether or not you hear from your creditors straight away you should start to make your proposed payments. You should have suggested the date you would make your first payment on your offer letter. Stick to this date and continue to make your monthly payments regularly after this. Some creditors will not agree with your payment proposal unless they can see you start to make payments regularly.
What if your creditors will not agree your reduced payment offer?
It is possible that one or more of your creditors will not agree with your reduced payment offer. If this happens it may be possible to satisfy them by reducing some of your living expenses slightly so you can increase the payment you make.
Having said that it is important not to agree to increase your payment to an amount you cannot afford. If you do this you will not have sufficient cash to maintain the other payments in your Plan and all of your living expenses. As a result you will run out of cash and your Debt management Plan is likely to fail.
DM4U Tip: If a creditor refuses to accept the payment amount you have offered and you cannot afford to increase this you should continue to pay them what you offered anyway. If you do this they may continue to add interest or charges to your accounts. However they are less likely to try and enforce their debt by taking further legal action against you.
What of your creditors continue to add interest to your accounts?
If you are maintaining your proposed payments to your creditors but they do not formally agree to these they will often continue to add interest and charges to your accounts. This can cause a significant issue as it may mean that despite the payments you are making the balance never reduces and at worst continue to increase.
If you find this is happening and it is impossible for you to improve your payment to the creditor the only alternative might be to consider a different debt solution. As solution such as a Debt Relief Order, Individual Voluntary Arrangement or even Bankruptcy could allow you to get control of the situation and get out of debt far sooner.
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