subject: What happens when my debt management planner or Trust Deed and IVA Insolvency Practitioner goes bust? [print this page]
In recent months, the debt management program planners DCM have gone into liquidation, last year it was the turn of Manchester based Chase Saunders. Insolvency Practitioners WM Proserv is also in the process of being made bankrupt.
While it is rare for a debt management planner or insolvency practitioner to go into liquidation, it is more a case of companies folding due to the pressures of the recession or poor management that anything sinister.
So what happens when a Debt management planner goes bust?
The account is left in limbo, there may be a company who eventually claim to take over the account but it really depends on their motivation.
The one thing about a debt management plan over any debt solution is that is it does not tie to into any formal agreement and you are free to walk at any point.
Please bear in mind, that if you do move to another fee charging company, you will be charged a new setup fee, typically the same as your disposable income so if you are in this situation, you can speak to CAS (Citizen Advice Scotland) or CCCS any these debt charities will assist you free of charge.
What has been reported on review websites is that with the cases of Chase Saunders and DCM, that the companies hadn't been paying creditors the contributions that they had received from their clients.This means that if you are on a plan with a troubled company, you're debt may have increased slightly and your creditors may or may not be in the process of sending default notices and reapplying interest and charges.
What happens when an insolvency practitioners goes bust?
As the processes of sequestration, bankruptcy, IVA and Trust Deeds are more formal than a debt management plan, there are procedures in place for this type of outcome. In the case of WM Proserv, the accounts were referred to an alternative insolvency practitioner, so as a client of theirs you really would have little to worry about.
There is an immediate sense of irony attached to a story of an insolvency firm going into liquidation; a somewhat crude analogy would be a fire station catching ablaze when the fire fighters are out tackling another fire. If you are struggling with your debts and you are worried about selecting a company for your debt management plan, help is readily available from debt charities. Alternatively, there are other options that you could look at.
A Trust Deed for example, is a solution to debt using government legislation for Scottish residents who owe more than 10,000 in unsecured debts and allows an individual to write off up to 90% of their outstanding debt. As with any advice or purchase, be cautious when selecting which company you use for your Trust Deed TrustDeedScotland.net, the leading introducers of the procedure in Scotland only work with reputable companies, ones who do not charge any setup fees.
