I think worse case scenario in Debt Management is if the creditors refuse to stop adding interest and charges to your debt.
If they did, then you have to work out what your minimum payments on your cards / loans comes to each month. Of your £300 per month W3 are going to deduct a percentage for what they call a 'Management Charge'.
For arguments sake, lets say that is 20% - so for every £300 you pay to W3, your creditors only actually see £240
If the minimum monthly payments are more than £240, then unless they agree to freeze interest and charges, I don't think you will ever be debt free, or at least will be making payments for a very long time.
If the minimum payments are less than £240, then you'll chip away at the debt and will eventually become debt free as the debt goes smaller, so should the minimum payments. Again that is on the proviso that the lenders agree to freeze interest and charges period and not just for a short period of time, say 6 months.
You must keep in mind that if creditors do agree to freeze interest and charges, they are at liberty to reverse that decision at anytime as Debt Management, as far as I am aware is not legally binding on the debtor or the creditor.
There is an alternative to Debt Management. But it relies on you being confident enough to mangage your finances yourself. Approach the creditors yourself and advise them of what you want to do. If you can get agreement directly from them, then you can run the debt management scheme yourselves and that way the creditors will get £300 of the £300 per month as opposed to the £240. Worth a thought!
Tell it like it is.
Last edited by
Cybus on Mon Sep 24, 2007 8:39 pm, edited 1 time in total.
Tell it like it is.
