Enterprise Debt Solutions (EDS) will go live on 1 November.
EDS will provide a link into an insolvency practice, who then provides advice and guidance to clients that are struggling with their debts.
On receipt of an introduction, the other parts of Enterprise Group will ensure there is no alternatives available for the client, in terms of a first mortgage or a secured loan, which can often be better options for clients in difficulty.
In the event that there are no available alternatives, then the introduction is passed over to an insolvency practitioner, to liaise directly with the client. The outcome may be a debt management solution or an Individual Voluntary Arrangement (IVA).
An IVA can be appropriate, when all other alternatives have been explored, and the client has at least £10,000 of unsecured debts, spread amongst at least three creditors, and is in full-time employment.
There are no upfront fees for the debtor, who then pays a monthly payment towards the arrangement agreed with the creditors. All interest and charges are usually frozen at the date of approval. Once the fixed term is completed, the debts are completely written off. In many cases, up to 75 per cent of debts can be written of, with approval from the creditors.
Introducing brokers receive an introduction fee from EDS, in the event of an IVA resolution.
Michael Clapper, chief executive officer (CEO) at Enterprise Group, said: “It has been widely publicised that the level of bad debt in this country is increasing rapidly, as a result of interest rate rises and people over-extending on credit. There is now a real danger that some clients will be given advice that is not in their best interests as there may be more suitable alternatives available. By being an integral part of Enterprise’s proposition, EDS can and will ensure that all avenues are fully explored before a client goes down the IVA or other debt management routes. This will keep brokers and networks safe, and ensure that clients can be helped by their broker, however bad their debt situation has become.”
