Q. Do we charge a fee for the work carried out?
A.Yes we do. We provide a service to you, our client acting on your behalf and representing your interests at all times, and in doing so, we need to cover our costs. Our fees are very competitive within our industry. The first month’s payment into the debt management plan is retained by us to cover the costs of setting up the arrangements, and thereafter we will charge a fee of 16% of the monthly contributions to cover administration costs.
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Q. What do we do for our money
A. The setup fee and monthly charges pay for a commitment by W3 Debt Solutions to ease your financial worries. Once we have complete details from you we will:
- immediately contact all your creditors informing them of the financial management plan
- provide your creditors with a comprehensive financial statement and offer of repayment
- deal with any mail from creditors you receive
- distribute an affordable monthly payment to all of your creditors on your behalf
- provide guidance, advice, and reassurance whenever you ring us
- deal with any obstacles or objections your creditors raise
- use all of our expertise to negotiate with your creditors to agree to the financial management plan and stop interest and charges.
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Q. Will interest and charges be stopped?
A. We cannot guarantee that creditors will stop interest and charges, but we will not stop pursuing this end – using all our experience and expertise to come to an agreement with your creditors. In practice we find that such charges do stop within the first few months in the majority of cases.
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Q. Can I add new debts to the plan?
A.Yes you can. Before you make your first payment to us you can add any further debts you wish into your plan. Once you have made your first payment you can add debts only at the six monthly reviews.
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Q. How often is my income and expenditure reviewed?
A.A thorough review of your financial situation and your outstanding creditors will be conducted by specialist reviewers every six months.
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Q. Will my creditors still contact me?
A. We will aim to stop all correspondence from creditors to you. However creditors may well still contact you during the life of your plan, but we will help you with this. Simply forward any mail you receive to us and we will deal with it. Any phone calls you receive – just give them our number and ask them to contact us, or you can give us a quick ring and we will call that creditor for you.
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Q. What type of debts can W3 Debt Solutions deal with?
A.We can deal with any unsecured debts that you have, such as credit cards, overdrafts, unsecured personal loans, store cards, catalogues, and many others.
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Q. Are benefits classed as an income?
A.Yes they are. You can have a financial management plan with W3 Debt Solutions if benefits are your sole source of income if this is the right solution for your circumstances, and any benefits you receive can be used by you to make payments into your plan.
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Q. Will my details be given out to any other agencies?
A.No, any information given to W3 Debt Solutions is strictly confidential; we will not speak to anyone about your financial management plan or personal details without your permission to do so.
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Q. What happens if I miss a payment?
A.You should, of course, do your best to maintain regular monthly payments, but if you need to miss a payment into your financial management plan we will contact your creditors straight away and ensure that the plan stays in effect. Should you find that you can no longer afford the payment into the plan we will review how much you can afford, and advise you on a more appropriate and affordable solution.
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Q. Am I still responsible for my debts?
A.Yes, you retain responsibility for your debts, but W3 Debt Solutions will act on your behalf for as long as your plan is in effect.
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Q. Will it affect my credit rating? [Also relates to Mortgage questions and car finance question]
A.A financial management plan may result in accounts you hold with creditors defaulting, which will affect your credit rating in the short term. However, over the length of the plan we will seek to repair your credit rating by distributing your payments to your creditors on a regular basis, and we will seek to stop any further action that will damage your credit rating.
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Q. How often can I miss payments before my plan is cancelled?
A.W3 Debt Solutions we will work with you to avoid such a situation! However, where payments are missed, we will contact you to discuss the situation so that we can give reassurance to creditors which may prevent them from taking recovery action against you. If you miss three consecutive monthly payments without further contact we will cancel your plan, and write to you to inform you of this. We will also have to inform your creditors that we no longer act for you, and they may then take action to recover their debt.
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Q. How often can my details be changed, and is this free?
A.You can ring in and change any of your personal details, for example phone number, address, surname, at any time. This is free of charge.
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Q. What do I do if my creditors do not accept the offer of payment?
A.If one of your creditors does not accept our offer of reduced payment we will inform you of this. This is not necessarily a cause for concern; we will contact the creditor and do our best to convince them to accept the offer – if they still do not accept we will continue to make the payment to them to keep up regular payments. Whilst they may refuse the offer, they will not refuse receipt of funds! We will deal with any further action from the creditor, or any collection agency they may contact.
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Q. What happens if my income changes?
A.Every six months we will review your income and expenditure. If your income changes substantially during the period between reviews (for better or worse), you need to let us know so that we can consider how this affects the Plan.
Providing that you can still afford the minimum monthly payment of £100 we will adjust your income accordingly and inform your creditors of this. Of course, if any changes mean that you can afford to pay more, this could have a dramatic effect upon the length of the plan, and may reduce the term considerably.
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Q. Does my partner have to know?
A.No, your financial management plan is treated as confidential – we will not share the details of it with anyone, unless asked to do so by yourself. If you do not wish us inform your partner, we will make an extra effort to be discreet in all our dealings with you.
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Q. Does my being in a debt management plan affect my partner or family?
A.No. As long as the debts you enter into the plan are solely in your name (or your partner’s name if it’s a joint plan) then it will not affect anyone not named in the debt management plan.
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Q. Will you be paying all my bills or just my debts?
A.We will distribute payments on your behalf to all of the unsecured debts you have entered into your plan. We will not pay any debts outside of the plan, and you will need to ensure that you cover your monthly bills such as your rent/mortgage, or current water/electricity/gas supplier etc.
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Q. Does it affect my property?
A. If you make the agreed payments into your financial management plan on time then your property should not be affected.
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Q. Will I have to open a new bank account?
A. Not in all cases. In order for you to be able to make regular payments into your financial management plan, and to retain control over your money, you may need to open a new bank account. Generally you will need to open a new account if you wish to add your current bank account debt into the plan, or if you have additional debts with that bank within the plan, such as a loan or credit card. W3 Debt Solutions will advise and support you in opening a new bank account, and try to make the process as easy as possible.
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Q. Can I still use my credit card?
A. If the credit card is entered into your financial management plan you will be expected to stop using it, and in most cases return it to the issuer. If the credit card is not in the plan then you would still be able to use it, but we would advise against this – after all, we are aiming to decrease your level of debt, not add to it!
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IVA Answers
Q. What happens if my creditors do not accept my IVA?
A. If you have ceased making payments to your creditors then the debts you owe will have increased as interest will have been added to them. It is important to look at other solutions for sorting out your debts such as an informal debt payment plan or bankruptcy
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Q. Why do I have to include my partners income - they are not part of the IVA?
A. Your partner’s income is not directly included in the IVA. However your creditors need to know how much you have to pay towards the household bills and this means that your partner’s contribution to those bills has to be taken into account
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Q. Why am I paying you &80 per month?
A. We charge fees which are agreed by your creditors to supervise the IVA. Our work includes monitoring payment of your contributions, reviewing your finances from time to time, preparing annual reports, agreeing all creditor claims and paying your creditors. Because your IVA is supervised by a licensed insolvency practitioner we have to comply with both insolvency legislation and professional guidance and rules. It is also important to understand that our fees affect your creditors not you. For this reason the creditors must approve our fees before we are paid.
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Q. If I receive a sum of money do I have to repay all my debts?
A. Creditors expect you to pay as much as you can reasonably afford after allowing for living expenses and some contingencies. Although your payment may seem high you it is worth bearing in mind that provided you keep up the payments all your unsecured debts will be cleared by the IVA
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Q. Do I have to include this creditor...they are my favourite!
A. All your creditors are entitled to be treated fairly and this means that for an IVA you must include all your debts and not set aside money simply to pay one creditor. The Insolvency Act requires that you must include all your debts in the IVA. If you want to treat one creditor differently from the others you must have very good reasons and these must be disclosed in the IVA proposal which is seen by all your creditors.
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Q. Can I just pay / keep this debt?
A. All your creditors are entitled to be treated fairly and this means that for an IVA you must include all your debts and not set aside money simply to pay one creditor. The Insolvency Act requires that you must include all your debts in the IVA. If you want to treat one creditor differently from the others you must have very good reasons and these must be disclosed in the IVA proposal which is seen by all your creditors.
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Q. I have had a threatening letter/phone call from creditor, what do I do? Should I pay them?
A. Until your IVA is approved it is likely you will continue to receive letters and calls from your creditors. Once we have agreed with you that you should go ahead with an IVA we will contact all your creditors and tell then what is happening. If you receive any more letters or phone calls please tell us and we will contact the creditor to make sure they understand you are going ahead with an IVA.
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Q. Why do I have to change bank account? I have been with them for years and want to stay with them.
A. If you owe money to your bank and you go ahead with an IVA your bank will freeze your bank account. This is standard bank procedure with all the major banks and when this occurs it can cause difficulties for you. It makes sense to open an account with another bank so you can be sure that your salary or wages will not be frozen leaving you unable to pay household bills.
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Q. How long will my case take now? What stage is it up to?
A. On average it will take 8 weeks from the time you first contact us until your creditors approve your IVA. There are various stages to go through. First of all we need to get together all the information about your finances including supporting documents. When this has been done we prepare the proposal document for you to approve and sign. We then arrange a meeting of your creditors to vote on the proposal. We have to give the creditors at least 3 weeks notice of this meeting.
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Q. What does the meeting of creditors involve, do I have to attend? What happens if it fails?
A. Nowadays the meetings of creditors are generally all done without anyone actually attending the meeting. Votes are received by post or fax. This means that you don’t have to attend the meeting but it is necessary for you to be on hand so that if there are any questions raised by creditors or if any of your creditors want to modify the proposal we can talk to you about this.
If the IVA is not accepted - If you have ceased making payments to your creditors then the debts you owe will have increased as interest will have been added to them. It is important to look at other solutions for sorting out your debts such as an informal debt payment plan or bankruptcy
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Q. Do I have a good case for an IVA?
A. At this stage you have a good case for an IVA. We need to get all your financial information together to be certain. If anything happens to change our advice we will let you know immediately. We will not ask you to sign a proposal if we do not believe your creditors will agree to it. It is very rare for an IVA proposal we prepare not to be accepted.
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Q. What happens if I have a change in circumstances?
A. It is important to tell us as soon as there is any change in your circumstances as soon as possible. Creditors will be sympathetic if unexpected circumstances make it difficult to keep up with payments at the agreed amount.
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Q. What happens if I get a pay rise or my income reduces (changes in circumstances)?
A. If your circumstances improve creditors will expect you to pay something extra towards your debts – generally 50% of any increase in your income. However your expenses will also be taken into account before you are requested to pay any increased contributions.
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Q. What if I can't re-mortgage (especially when we are relying on a substantial amount)?
A. The IVA may be extended for 12 months and during this time you would continue to pay income contributions. You would be freed from the obligation to remortgaged. You will not be expected to raise a mortgage which is unaffordable or is more than 85% of the value of your house.
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Q. How much are your fees.
A.Our fees depend to some extent on the amount you propose to repay. Firstly we charge a fee for setting up the proposal known as ‘The Nominee’s fee’. This is a fixed amount and will be set out clearly in the IVA proposal. Secondly we charge a ‘Supervisor Fee’ which is generally charged as a monthly fee. Again the total amount of this fee will be set out clearly in the proposal. In your IVA you will probably not pay all your debts in full which means that it is your creditors who will be directly affected by our fees and for this reason they must approve the fees before we can be paid. In your case the Nominee’s fee is likely to be £[ ] and the Supervisor monthly fee is likely to be £] per month plus VAT.
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Q. What is an IVA?
A.An Individual Voluntary Arrangement (IVA) is a legally binding contract made between you and your creditors. Generally you will agree to make a set monthly payment to the supervisor of the arrangement for up to 5 years. If you own a house you may also agree to re mortgage your house and to release equity in the house at the end of the arrangement as well as paying contributions from your income.
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Q. How do I know an IVA is right for me?
A.Participation in an IVA is a serious decision and should be carefully considered. W3 Debt Solutions will provide you with a copy of the information leaflet "Is A Voluntary Arrangement Right for Me?" which provides independent information about the pros and cons of an IVA . We will discuss the content with you to ensure your decision is based on full information.
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Q. How does it work in practice?
A.The payments you make will be distributed on a regular basis to your creditors. In return for you making a commitment to pay what you can reasonably afford your creditors will agree to be bound by the arrangement. The IVA has added powers to a simple contract. Even creditors who have not agreed or bothered to vote for the arrangement will be bound by its terms.
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Q. What makes a W3 Debt Solutions IVA different to any other?
A.W3 Debt Solutions are able to offer a wide range of debt solutions and will only recommend an IVA if we feel this is the most appropriate solution. Our dedicated team have extensive experience with IVAs and are able to provide you with the benefits of this experience and industry knowledge.
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Q. Is my home safe?
A.When you enter an IVA your home will be protected from being sold and Creditors will no longer be able to take any court action against you. Before the end of the IVA it may be necessary to realise a percentage of your share of the home by arranging a re mortgage or further advance. If you have difficulties doing this the IVA can be varied with the agreement of creditors. This may mean that creditors will accept a reduced amount if that is all you can afford, or creditors may agree that the arrangement will be extended for up to 12 months and income contributions be paid in place of obtaining the re mortgage.
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Q.Can you get joint IVAs?
A.Yes, IVA proposals can be produced on an interlocking basis taking into account the full financial situation of yourself and your partner.
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Q.Do all my debts go into an IVA?
A.Yes, it is imperative that you disclose your FULL financial situation and give details of ALL debts. While the IVA will deal with your unsecured debts we need to know about any mortgages or secured loans so that we can advise you appropriately. Most debts are covered by the IVA but there are one or two exceptions such as court fines and CSA payments.
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Q. How much does an IVA cost?
A.The costs involved in an IVA are our fees and some expenses such as Court fees. The costs depend to some extent on the amount you propose to repay. Firstly we charge a fee for setting up the proposal known as ‘The Nominee’s Fee’. This is a fixed amount and will be set out clearly in the IVA proposal. Secondly we charge a ‘Supervisor’s Fee’ which is generally charged as a monthly fee. Again the total amount of this fee will be set out clearly in the proposal. In your IVA you will probably not pay all your debts in full which means that it is your creditors who will be directly affected by our fees and for this reason they must approve the fees before we can be paid.
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Q. How long does an IVA last?
A. Again this is dependant on the circumstances of each case. Typically an IVA will last for 60 months but it can be longer or shorter if the circumstances warrant this.
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Q. Who needs to know I have an IVA?
A.Aside from your creditors and ourselves no-one. W3 Debt Solutions will not inform any third parties of your circumstances without your consent. Entrance into an IVA will be listed on the Insolvency Service website and registered with the DTI. This means it will show up on future creditor searches carried out against your name but in contrast to bankruptcy it will not be published anywhere else.
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Q. I run my own business - can I still trade?
A. Yes, it is possible to continue to trade if you have a surplus income every month. However, it is important to bear in mind that if you will need credit during an IVA for your business and this has to be disclosed in the IVA .Generally creditors will expect you to obtain the Supervisor’s consent before obtaining any additional credit.
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Q. How long does it take to set up an IVA?
A.This depends on how quickly we receive all necessary documentation and information. If all essential information is provided the meeting of creditors can be arranged within six weeks including the legal notice period.
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Q. How do creditors’ meetings work?
A.Your creditors will be invited to vote on the terms of your proposal. A 75% majority of those creditors who vote at the meeting is required in order for the IVA to be approved. If this is achieved all creditors will be legally bound by the arrangement. During the meeting process creditors will be able to propose modifications to the proposal and these will be discussed during the meeting period.
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Q. What if my circumstances change during the course of the IVA?
A.The W3 Debt Solutions IVA proposal includes a clause enabling us to seek creditors consent to the terms of the IVA being altered if your financial circumstances change. For example it may be possible to negotiate a payment holiday, or a reduction in payments. This is at the discretion of the creditors however and their acceptance will depend upon the circumstances surrounding the change.
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Q. What happens if my financial circumstances improve during the life of the IVA?
A.Again this is dependant on the exact change in circumstances. It is often possible to reach an early settlement of an IVA and creditors may grant early settlement in exchange for a lump sum payment. Any financial windfall or inheritance however should automatically be paid to the Arrangement to repay your debts in full.
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Q. What if my circumstances change during the course of the IVA?
A.Income and expenditure reviews are carried out on a regular basis during the IVA to assess the affordability of payments and this may result in an increase in contributions or an alteration as above depending on the amount of the change.
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Q. What fees do I need to pay?
A.All fees and costs are taken from the single monthly payments you make towards the IVA. Your proposal will clearly set out the fees and expenses which are to be paid and both you and the creditors will know exactly how much these are.
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Q. Will I have to go court?
A.No, an IVA application is lodged with your local county court but this purely a formal exercise. Any meeting will take place at the office of W3 Debt Solutions and attendance is not mandatory.
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Q. Will my creditors still call me while my IVA is being set up?
A.Your creditors are legally entitled to contact you until the approval of an IVA. W3 Debt Solutions will contact them on your behalf whilst an application is proceeding and whilst we will do our utmost to liaise successfully with the creditor we cannot guarantee they will cease contact.
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Q. Can I still use a credit card during the IVA period?
A.No, all current credit facilities will become inactive and it is normally an express term of the IVA that, with the exception of utilities, no further credit is incurred.
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Q. I live with my parents - will they be blacklisted?
A.No, any adverse credit scores or rating will be applied to the individual rather than the household.
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Q. Can I still have a bank account?
A.Yes. A basic bank account is a requirement of all IVAs and there should be no reason why a bank would decline an application. However, an overdraft would be viewed as further credit so this would not be permissible.
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Q. What is debt management?
A. Please refer to DMP
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Q. Is bankruptcy right for me?
A.We will advise you on the options which are available for your situation and we are happy to discuss these with you. When you have considered our advice you will be able to make an informed choice and decide which option is best for you.
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Q. Will I have to give up all of my assets?
A.The majority of your assets will be protected within the IVA although this is dependant on your overall financial situation and the value of the assets. In bankruptcy proceedings the trustee will be able to realise all assets with the exception of ordinary household contents, a modest motor vehicle, essential tools of trade and any money in a pension fund provided the fund is not large or you are likely to be able to take the benefits in the next few years.
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Q. Do I have to list all of my debts?
A.The majority of your assets will be protected within the IVA although this is dependant on your overall financial situation and the value of the assets. In bankruptcy proceedings the trustee will be able to realise all assets with the exception of ordinary household contents, a modest motor vehicle, essential tools of trade and any money in a pension fund provided the fund is not large or you are likely to be able to take the benefits in the next few years.
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Q. Will I lose my house even if I am currently up to date with payments?
A.With regards to IVA click here, with regards to bankruptcy click here
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Q. Will the trustee come to my house?
A.Nowadays it is extremely rare for a Trustee in Bankruptcy to come to someone’s house. The Trustee would normally request any meetings to take place at his office.
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Q. Does my spouse have to file bankruptcy with me?
A.No, bankruptcy is a personal transaction which only affect you. If both you and your partner wish to go bankrupt you must present two separate petitions.
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Q. Will bankruptcy stop wage garnishments?
A.Yes although it is likely that the Official Receiver would insist on a replacement garnishment so that you make a payment to the Official Receiver each month for the benefit of all your creditors and not simply the creditor who had the original garnishee order.
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Q. Are there debts I cannot discharge?
A.Some debts are never included in bankruptcy or an IVA. Mortgages and secured loans including Hire Purchase debts still have to be paid and if you fail to pay these the lenders can repossess the house or vehicle which they hold as security for payment. Certain other debts will not be included in bankruptcy or an IVA such as Court fines and CSA arrears. Although arrears of Council Tax payments will be included you will still be liable to pay Council Tax which becomes due after the Bankruptcy Order of after the IVA was approved.
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Q. Will I be allowed to file bankruptcy?
A.If you owe more than £750 to any creditor you may present your own petition for bankruptcy. This link directs you to the Insolvency Service website and a basic information leaflet
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Q. Can I discharge my student loans?
A.Student loans are exempt from bankruptcy proceedings following the Higher Education Act 2004. They can, however, be included in an IVA and will rank alongside other unsecured debts.
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Q. What do I have to do to file for bankruptcy?
A. Nowadays the meetings of creditors are generally all done without anyone actually attending the meeting. Votes are received by post or fax. This means that you don’t have to attend the meeting but it is necessary for you to be on hand so that if there are any questions raised by creditors or if any of your creditors want to modify the proposal we can talk to you about this.
If the IVA is not accepted - If you have ceased making payments to your creditors then the debts you owe will have increased as interest will have been added to them. It is important to look at other solutions for sorting out your debts such as an informal debt payment plan or bankruptcy
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Q. Can I put my assets in someone's else's name before filing?
A.No, there is a distinct possibility that this would be regarded as a "transaction at undervalue" under the terms of the Insolvency Act. Any disposal of assets in this way would be subject to review in bankruptcy or IVA proceedings and could lead to legal action for recovery. In the worst case such action could lead to criminal charges for fraud.
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Q. Will I lose my retirement savings?
A.Cash savings would be lost if you went bankrupt. However save in exceptional circumstances your pension which has yet to be cashed will be protected. . However, you should seek advice if the fund is large or if you are likely to be able to release the fund in the next few years.
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Q. Can I get credit after bankruptcy?
A.Whilst it may initially be more difficult to obtain credit after a bankruptcy or IVA it is certainly not impossible and your credit rating will not be permanently blacklisted. Your credit rating will gradually improve.
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Q. Does a previous bankruptcy prevent me from filing?
A.No but the Official Receiver will be concerned about the reasons for the second bankruptcy and will look closely at your conduct and the circumstances leading to the bankruptcy.
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Q.Are there any tax consequences to filing for bankruptcy?
A. Any income tax which is payable in the tax year during which you file for bankruptcy will be included as one of your bankruptcy debts.
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Q. Can I file for bankruptcy without a lawyer?
A.Yes, you can present your own petition for bankruptcy and should contact your local county court if you need assistance is this matter.
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Q. Remortgage: How much can I borrow?
A.Refer to W3 Debt Solutions Home Loans.
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Q. Can I raise extra money?
A.I am unclear what this question means.
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Q. How long can I take a mortgage loan over?
A.Refer to W3 Debt Solutions Home Loans.
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Q. My credit history is not very good, how will this affect my application?
A.Unclear if this is referring to IVAs or re-mortgages. If IVAs the credit history will not affect the application - any decision is made purely on the basis of the proposal terms?
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Q. How confidential is the information I give you?
A.All information provided to W3 Debt Solutions is completely confidential. We adhere to all data protection principles and best practices and pride ourselves on our discreet approach.
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Q. How long does a mortgage take to complete?
A.Refer to W3 Debt Solutions Home Loans.
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Q. How do I choose the right mortgage for me?
A.Refer to W3 Debt Solutions Home Loans.
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Q.How can I be sure I'm getting a competitive deal?
A.Refer to W3 Debt Solutions Home Loans.
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