Contacting Your Creditors & Calculating Offers
Step 1:
First you will need to sort out all of your priority and non-priority debts
Step 2:
Record them on the creditor checklists provided. This should include the name of the creditor/collection agency and account number (see checklists included for guidance).
Step 3:
Contact your priority creditors (if any) and agree realistic payment arrangements where possible. (Record details on your checklist)
Step 4:
Suspend payments where necessary and send holding letters (included in this guide) to all of your non-priority creditors. If a creditor does not respond within approximately 21 days, you should telephone them or assume the latest balance available. (Record details on your checklist)
If you have a bank or building society into which your income is paid and have direct debits or standing orders set up to non-priority creditors they should be cancelled. This is especially necessary if your account is overdrawn incurring interest and charges leaving no money for essentials and increasing your debt. Any priority direct debits or standing orders (such as rent, mortgage, council tax, etc.) should always be left in place if possible, however see below.
Important: If you have a debt with any bank or building society into which your income is paid you will need to deal with this differently. The reason being that you may face problems with them taking monies from your account (without your permission) to bring any credit card, loan or overdraft associated with them up to date. This could result in no money being left for essentials and priority creditors including direct debits and standing orders set up through any such account.
In this situation, the best advice would be before sending a holding letter you should open a new basic account with a bank or building society not associated with any of your current creditors and transfer all of your income. After confirmation that all of your income payments (wages, pensions, benefits, etc.) have been transferred to your new account you can then send a holding letter and include the creditor in your plan.
If you do change your account, you must make sure that any priority payments such as mortgage, rent, council tax, insurances, utilities or TV licence are transferred or paid manually.
Please contact the bureau if you need further advice on this issue or if you require a list of banks and building societies.
Information on Bank Accounts
Step 5:
When you have received / assumed all your non-priority creditor balances and recorded them on your creditor checklists, you will need to complete your personal budget sheet (financial statement) provided.
It is essential that your Financial Statement clearly shows your total income received and total outgoings. You must include all income (wages, benefits, pensions, etc.) however if you work overtime, we would only advise that you include this if it is guaranteed.
You may wish to look into ways of increasing or maximising your income. For example, check your benefit and tax credit entitlement, contributions from other household members (board, etc.), renting rooms, other part-time jobs, etc.