What to do if your debt management company closes

Recently there have been several Debt Management firms ordered to cease trading by the Financial Conduct Authority (FCA). But do you know what to do if your Debt Management company closes? There's no need to worry, here are a few simple steps to follow to help you ensure your debt repayment stays on track.

Step 1 – Prevent any further payments to them

In the first instance we’d recommend checking when your next payment is due. If it due out soon, make sure you prevent this payment from being taken to make sure you don’t run into any more complications.Reduce the chance of losing your money. Don’t worry if you think it will make your payment late. Ensuring the firm dealing with your money is operating legitimately is a perfectly good reason for a month’s late payment.Any problems arising can be dealt with simply and easily by a well-established debt management firm with good relationships with creditors.

Step 2 – Do your research - don’t choose the first company you see

Other debt management firms may hear the news and attempt to contact the failing firm’s customers in order to offer their assistance. Don’t just consider these firms. Looking at other firms is a sensible option, but you need to be wary as there are more firms out there who may be just like your last. Now is your chance to do your research. Don’t feel pressured to jump into another plan with the first firm that offers their help.

Step 3 – Don't be put off, not all Debt Management companies are the same

Although this is a tough time for you, it’s important that you make the right choice. It’s easy to dwell on the negatives, but try to see this as a great opportunity to kick start on the progress you’ve made paying back your debts to date with a new organisation who may be able to offer you much more.

Step 4 – Decide whether you want to go with a fee paying or fee free firm

There are hundreds of debt management firms out there who charge set up, on-going management and annual review fees, which can add thousands to the amount you pay back. By choosing a company that offers a fee free debt management plan, you could significantly reduce the amount of time it takes to pay back your debts and ensure 100% of your payments go directly to your creditors.

Here are some more commonly asked questions;

FCA explained

Who are the FCA?

In April this year, the Financial Conduct Authority (FCA) took over from the Office of Fair Trading (OFT).They ensure consumer credit companies and advice agencies treat customers fairly and ethically.

What about my payments?

I’m worried about the payments I’ve already made, what do I need to do?

Don’t panic. If the firm you have been paying your money to has shut down, or ceased trading you should contact the Financial Conduct Authority on 0800 111 6788 (or 0300 500 8082 if calling from a mobile). They will contact the administrators who will provide you with an update on the situation.

I want a Free DMP

I want to move my DMP to a fee free ClearStart plan

We deal with customers moving their DMPs to us all the time, so we’ve made the process streamlined and easy. Contact us on 0800 988 7534 today and speak to one of our advisors. They will take a look at your current situation and make sure you’re in the right solution for your circumstances. If a DMP is the right solution, we’ll be happy to get everything sorted for you, free of charge.

Free DMP or fee paying?

Is a fee free DMP better than a fee charging DMP?

Both DMPs work in exactly the same way, but ensuring you don’t pay fees reduces the length of time you pay back your debts along with ensuring 100% of your payment goes to your creditors.

Apply for a free DMP

Speak to one of our Debt Specialists today

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