Debt Management or Debt Management Plans
A Debt Management Plan is where your creditors agree that you may repay your total debt in more affordable installments over an agreed period of time. Because they are informal arrangements, there are no solicitors or Insolvency Practitioners involved. But this informality can come at a cost. It is possible for creditors to review your case and push for increased repayments. Although you request that the interest and charges are stopped (and they often do), they are not obliged to do so, so total debts may increase as will the amount of time needed to repay them.
Like all debt solutions a Debt Management Plan should be assessed against all other options. If you feel that a Debt Management Plan is for you, you can either attempt to negotiate a plan yourself or get professional help. If you do get professional help negotiating a Debt Management Plan using an organisation that does not charge commission or fees for negotiating the plan is recommended. These fees are better used to pay off your debt. Organisations that don't charge for Debt Management Plans include the CCCS.
If you do decide to use a commercial debt management company then ensure you find out:
- How much you'll be paying in commission
- What guarantees or assurances creditors offer on freezing interest and charges
- How long you'll be in the plan for
- How often is the plan reviewed
- How often will you get a statement of your plans account
You’ll find lots of questions and answers about Debt Management Plans in the Q & A part of the website. If you don't find what you're looking for, why not ask a question. Whichever debt solution you decide to go with, better financial management is essential. It will also increase the likelihood your debt solution working and you not falling into debt again.
Popular companies that negotiate and manage Debt Management Plans
Alternative debt solutions
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