DRF welcomes Northern Rock announcement on interest freeze
It has been announced that as of 1st September, Northern Rock will be freezing interest on debts owed by customers entering into a Debt Management Plan.
The Debt Resolution Forum (DRF), trade body for fee-charging debt solution companies, welcomes the announcement from Northern Rock that, from September 1, they agree to freeze all interest on debts owed by customers entering Debt Management Plans in order to help repay their debt.
DRF Chairman and CEO of ClearDebt, David Mond, confirms his delight that Northern Rock have decided to take this very positive approach to people trying to repay their debts to them. He comments:
“DRF strongly welcomes Northern Rock’s decision: Interest which is added to these kinds of debts often makes it very difficult for struggling debtors to repay what they owe. This is a breakthrough and, whilst many creditors do freeze interest and charges, we hope many other creditors will follow Northern Rock’s example by formalising this.”
Northern Rock announced positive changes to their policies regarding acceptance of IVAs earlier in the year, after dialogue with DRF.
A full copy of the statement from Northern Rock can be found on the DRF website.
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Notes to Editors:
The document from Northern Rock covers in detail their new interest-charging policies for their three unsecured loan product types which will affect any new proposals received moving forward. In short:
• Unsecured Personal Loans – interest on these debts will now be frozen for as long as it takes for debtors to repay monies owed.
• Delinked Unsecured Loan – interest on these debts will now be frozen for an initial period of 12 months and subject to annual review.
• Linked Unsecured Loan – Mortgage loans within a linked loan must be separated as an essential expense and priority debt. Interest forgiveness will be granted for an initial period of 12 months and subject to annual review.
• Should debtors miss two payments, they will be in breach of contract and their arrangement and the account will go back into the Northern Rock collections process accruing interest at contractual rate.
For more information please contact:
Andrew.smith@debtresolutionforum.org.uk
0161 968 6825 / 07912 407 532
Twitter: www.twitter.com/DRF_UK
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