If your Debt Management Company has closed it can be a worrying time. You need to understand how much debt you still owe and what to do next.

• What happens to money you already paid?
• Do you still have to pay your debts?
• Should you start a new debt management plan?

Rather speak to a person? Call 0800 077 6180 or fill in the form below and we’ll call you.

If your Debt Management Company has closed what happens to the money you paid them?

You should not have to worry about the money you have already paid into your Plan. This should have been distributed to your creditors in accordance to the terms of your agreement.

Debt Management companies are regulated by the Financial Conduct Authority (FCA). The FCA states that any money paid into your plan should be distributed to your creditors within 5 working days (CASS 11.10.2).

Because of this you should not suffer any financial loss. The balance of your outstanding debts should be no different to what they would have been if the company was still managing them .

As soon as you learn that your debt management company has closed you should stop making any further payments to them. Cancel your standing order.

Are you still liable to pay your Outstanding Debts?

Even though your debt management company has closed you are still responsible for your outstanding debts. You remain personally liable for the outstanding balances.

You should have a good idea of how much you still owe to your creditors from the last statement you received from the company. They should have been sending you one of these at least once a year.

If you are unsure how much you still owe the best thing to do is contact your creditors and ask them. You can then explain the situation and what plan you are putting a plan in place to continue paying them.

A debt management company does not pay your debt for you. It just manages your payments. You still owe your creditors any outstanding balances.

Should you start a new Debt Management Plan?

If your Debt Management Company has closed you need to decide how you will manage your outstanding debt. If you want you could start a new debt management plan. There are various different organisations and companies that can help you do this.

You can chose to work with a new commercial Debt Management Company if you wish. They will charge you a fee each month for managing your Plan. You could also consider using a debt charity who will manage the agreement for free.

Alternatively there is nothing to stop you managing your own Plan. However you must be confident that you will be able to manage the multiple payments on time. You will also need to undertake any ongoing negotiations with your creditors yourself.

Consider whether a debt management plan is still the best solution for you. There may be a better option that will help you become debt free more quickly. Give us a call (0800 077 6180) or complete the form below to discuss your options with one of our experts.