Definition of FAQ
Most Frequently Asked Questions
1. What is a Debt Management Plan (DMP)?
A Debt Management Plan is an arrangement between a debtor and a creditor that addresses the terms of an outstanding debt. Our DMP exists to assist debtors with all their unsecured debts and helps maintain a workable repayment plan based the debtor’s affordability.
2. Who can benefit from a DMP?
People who are financially struggling and have missed EMI’s mainly on their unsecured loans and credit cards.
3. How does a DMP work?
Our trained debt advisors will establish your financial circumstance and work out how much money you can comfortably afford to pay towards your outstanding debts, this is called your ‘Disposable Income’. Once your disposable income has been determined and you have fully signed up with our services, we will liaise with your creditors on your behalf and negotiate a realistic and workable repayment plan that suits both parties.
4. What documents are required from me?
The information we collect from you to establish your financial circumstance will need to be proven when negotiating with your creditors. You will need to provide certain documents upon our request, like pay slips and utility bills.
5. I am being harassed by collection agents, how can you help with this?
Our trained debt lawyers will be your shield between you and any unlawful behavior conducted by any collection agent. We will liaise directly with all your creditors and the authorities if there is any evidence of harassment. We are fully aware of the aggressive behavior used by collection agencies and we have a proven record of minimising this issue. Once you have signed up to our debt plan, you can direct all their communications to our legal team who will be vigorous in protecting you. In few cases, when harassment persists and aggravate then our lawyers would share NC draft to file a police complaint.
6. Can the bank reject your offer when setting up a DMP
Initially the creditors may not accept the reduced EMI since the initial loan agreement has already been defaulted. Do not worry, negotiations can last up to 6 months, in the meantime, your creditors will receive the amount agreed on the DMP until negotiations have been concluded. In this instance, whilst we are in the negotiation stage, it is very important that you maintain the DMP arrangement with us without missing any payments as this may go against you when trying to solidify the new arrangement. During this stage, your creditor may ask you directly for the full amount of the EMI, and they are within their rights to do so, however, as we are your representatives, you can direct this communication to us until the DMP has been accepted.
7. How long would it take for the DMP to be accepted by my creditors?
This will vary depending on the creditor, but from our experience we have found this could be up to six to eight months before they accept our offers.
8. Would a settlement be more beneficial for me than a DMP?
If you can make a settlement, then yes, that option is there for you, but please note that in some cases your credit score is affected permanently due to settlement. However, if you have multiple creditors to whom you have outstanding debts with, then the question is; Will you be able to honor your remaining EMI’s? If the answer is no, then a settlement may not be the right answer. A Debt Management Plan is designed to deal with all your creditors simultaneously and efficiently. It will ensure that your creditors are being treated fairly whilst you are in an arrangement. If your circumstances change for the better and you can clear your outstanding debts, then you can instruct us to do that for you where we will negotiate a settlement amount on your behalf.
9. What if there is legal case filed against me during DMP process?
If a legal case is filed against you or if you are issued with a Legal Notice during the DMP process, our lawyers will assess the best course of action and will advise and assist you in defending it. In other circumstances where lawyer needs to appear in court, charges will be shared as per the requirement.
10. Why would my creditor accept the offer?
Creditors are in the business of lending money; they make their profit from charging interest on the money they lend out. If you are unable to repay the money back, then the creditor’s first option is to offer you a settlement. In many cases, the settlement is not a viable option for the debtor and so the creditor will begin to chase the debtor for the full EMI, regardless of your circumstance. However, once you are on our DMP, you are instantly protected by our legal team. Our team of experts will liaise with your creditors to present your case of hardship and your willingness to repay the outstanding debt. Once the creditor is aware that you have a full legal team working on your behalf you will find that the negotiations can commence. It takes few months by creditors to accept our offer as they would look for consistent payments from a defaulted account before any new agreement.
11. Will my interest will be freeze?
Creditors will not freeze the interest and charges initially, because they would need to monitor your loan account to make sure that you are honoring your new payments. After six months we will be asking for your interest and charges to be frozen or reduced. In the case of credit cards, we will request that the amount outstanding is converted to an unsecured loan at a reduced interest rate.Our lawyers will also undertake a “full financial audit” on all your loan documents to check that the creditors had followed RBI guidelines when giving you the loan. If we discover that these RBI guidelines were not followed, our lawyers will demand that the loan is written off or the interest and charges suspended or written off from the initial date of the loan.
12. Will the payment made be considered towards the principal debt or the interest?
It solely depends on the revised EMI amount and classification of your loan account based on your earlier missed payments and penalties and interests due in consequence to the same. The revised EMI will go towards reducing the total debt outstanding (principal, interest and charges). This is because the creditors will need to be satisfied that you are able to maintain the payments over a period of six months or more. Only then will the creditors entertain any request from our lawyers to freeze or reduced the interest.
13. Will my harassment stop?
When you sign up to our DMP, our lawyers will inform all your creditors that we are now dealing with all your debts and that all communications should be directed to us only. You will also receive a letter of engagement from us confirming the appointment of our lawyers, which you can show to any creditor that visits you at home or at work. This will usually stop the creditors from harassing you, but if the creditors are still persistent then our lawyers will draft out notices and will Advice you to register a complaint to the police in the form of a NC (Non-Cognizable) or FIR (First Information Report). But you must note that our lawyers can only use the law to stop harassment and this can take up to eight weeks to stop all harassment.
14. Do you have tie up with banks?
We are working and communicating with these financial companies daily and we have built good relationships with them. Our working relationship is improving day by day. Some of the financial institutes have approached us with praise, it’s only a matter of time until the rest of the institutes willingly come on board as our debt plan is beneficial for all parties involved. There are different types of lending institutes ranging from NBFC to app and private lenders. Hence, even if we have relationship with many it would be difficult to have existing relationship with all. We follow rules laid by authorised bodies hence it is anyways immaterial whether we do have relationship with these lending institutes or not.
15. How old is your company?
We are part of a UK company that has been in the debt management industry for the last 35 years and now we have entered India’s market, since November 2018. All our financial advisors are trained by our UK Company and we have our own bespoke software. We are transparent in all our transactions and we offer all our clients an online login to monitor all the payments and correspondence. We also have our panel of lawyers that are knowledgeable in all legal matters related to consumer debt and advised by a renowned Chambers of Barrister in Law from Mumbai.
16. What is the refund process?
We will refund your initial fees after seven days from signing onto the DMP, if you cancel thereafter, we will refund any funds that we have not paid to your creditors.
17. What if I have surplus money available?
If you have surplus money available, you must inform us so that we can distribute it towards your creditors, this will help you complete the plan and become debt free sooner than the plan has quoted.
18. What if I want to terminate my contract?
This DMP is an informal agreement and you can cancel this contract at any time without incurring any penalties, if you cancel within the first seven days of the DMP than you will be entitle to a full refund of your initial fees and thereafter we will refund any funds that we have not paid to your creditors. We would also inform all your creditors about the termination of the contract thereafter.
19. Would my EMI remain same?
We will review your DMP every six months and if there are any changes in your circumstance, then the DMP will change accordingly.
20. Will my credit score be effected?
This will depend on your current debt position. If you have already missed any EMI’s then credit score has already had an adverse effect to reflect the missed payment/s. If you have not missed any EMI’s, then going onto the DMP will influence your credit score. If you anticipate that you will miss a payment because you are aware of a forthcoming change in circumstance, then using the DMP could be solution. In the long run, your credit score will improve if you stick to the plan, as the creditors can see regular payments and the debt being honored. This will be reflective in your credit score.
21. What are your fees?
We will charge the first two months of your DI (disposable income) as our set up fee. It will take our lawyers two months to set up your DMP and to get all the paperwork needed from all your creditors and yourself to put the plan together. During this period, we will deal with any harassment and communications from your creditors. Once we have obtained everything we need to proceed, we will begin the DMP and will make payment to all your creditors. We would send offer letter intimating our intend to pay specified amount to respective lenders post your second payment i.e. 31st day after first payment. Thereafter from 61st day we would start making payments post receiving your 3rd payment. There is a monthly management fee of 12.5% plus GST for managing all your creditors and payments. This amount is taken from your monthly payment on the plan.
22. Why do I have to pay 2 months fees?
It is during the first two months that our lawyers will do about 80% of the legal work to set up your DMP and deal with the harassments and legal Notices.
23. Why I would still pay interest during a DMP?
Whether you are on a DMP or not, you would still pay interest on your loans. After going onto a DMP we are asking your creditors to accept reduced EMI and in most cases after you had defaulted on the original agreement with the creditors. So initially your creditors are not going to freeze your interest until they are satisfied that you will maintain the new arrangements, and as per RBI’s advice, we will be requesting the creditors to freeze interest and charges which will be to their discretion.
24. Can I pay my fees after 2 months?
We have our panel of lawyers that set up your DMP and deal with all your legal issues like harassment, legal Notices, drafting out legal replies and correspondence with all your creditors. We must pay our lawyers for the work that they have undertaken which is billed to us on a per case basis, which is the reason why we need to be paid prior to them undertaking these tasks.
25. Why do you charge a monthly management fee?
Once the DMP is set up, we will take full control of the plan and manage it on a monthly basis. Individual payments will be made to all your creditors every month via their preferred method of payment which can vary from each creditor. We will ensure the correct accounts are credited with the correct amount, ensuring that relationships are built with your creditors which will enable us to request for the interest and charges to be frozen. We will liaise with your creditors on a regular basis keeping the plan in order. We will also continue to protect you from any harassment that may occur during the plan. Passing on any legal issues like Notices and drafting replies to the lawyers to deal with on your behalf. Having a dedicated financial advisor to handle your DMP and a one point of contact for you and your creditors. We will also make any changes to the DMP if your circumstances changes and we will review your DMP after six months and make any changes if required.
26. When can I see payments reflected on my loan account?
We would provide you with payment receipts of all the payments done to your creditors monthly. Further, in few cases it takes time to reflect in your loan account the same sometimes even 90 days for the reason that it is residual payments. We would provide you with draft which you can write to your lenders asking the reason. We would escalate the issue post 30 days of your writing to ombudsman for the same seeking reply from lenders and ensuring that the payments reflect in your loan account thus.
27. How would I get to know the banks are receiving the payments?
You will be able to check on your loan account that our payments are reflecting on these loan accounts. If they are not then we do email you proof of payments which you can show to your creditors, to ensure that they are credited to your loan account. The only reason that they will not reflect on your loan account is if you have not informed us of the correct NEFT details of our loan account. Please note that the NEFT details that the debt collection people share with you is NOT your loan account NEFT details, this is a general debt account and this will take time to reflect onto your loan account in those cases you would need to chase them to ensure that it reflects on your loan account with the proof of payment.
28. What is the tenure for the plan?
The PDP is designed to help you whiles you are going through your financial difficulties; this is NOT designed to take over or to restructure your existing loans. The tenure will depend on how long it will take you to get back on your feet and have the financial standing to start repaying the original EMI or write off the loan by paying it in full or settlement, which we can assist and obtain a good discount on any settlement.
29. Can I increase or decrease the payments?
Yes you can increase or decrease your payments but that will depend on your finances. Initially to determine your payments to your creditors we will undertake a due diligence on your finances which will determine the payments to the creditors. For us to increase or decrease the payments we would need to undertake the due diligence again, and only if they are any changes in your finances that we can make the change in your payments.
We can make changes to the payments to your creditors if they are offering you some relief on your loan and is beneficial to you.
30. How will you handle the visits from collection agents?
The creditors are within their rights to visit you at home and your place of work if you do not reply or answer their calls or other communications. That is why we ask you to inform the creditors that Single Debt is managing your debts and inform them to call us directly, and also to forward all legal letters and Notice to us so that we can reply on your behalf. In the case that the creditors do visit your home or place of work you can inform them to call us directly or take them on a conference call with us. We do advice that you record all calls and video their visits so that our lawyers can take action if there is any illegal action taken by the creditors.
31. Can we enroll for only the accounts we want to consolidate?
No, you can not pick and choose which of the unsecured loans that go into the PDP. This is because all the creditors have to be treated equally, otherwise the creditors will not accept the payment plan.
If you have any questions about SingleDebt, online FAQ’s or procedures, please email us at: info@SingleDebt.in