Thinking about getting a Debt Management Plan? Want to know more about them and where you can find out more? No problem we have got you covered. A Debt Management Plan is an informal agreement between you and your creditors. You make reduced payments until the debt is repaid in full.
You would normally appoint an organisation to manage your debts on your behalf but there is nothing to stop you doing it yourself if you wish. On a personal level I currently manage my own debt using a Debt Management Plan. It is quite a bit of work initially but once you have things set up it isn’t too bad. You can find out how to set up a Debt Management Plan on this blog if you are interested.
What happens when you apply for a Debt Management Plan?
Typically you will speak to an organisation and they will request some information from you. Typically the information requested will be: –
- Details of your Debts.
- A list of your income and expenditure.
- Account numbers and names for your creditors (the people you owe money to).
Once they have this information they will then work out how much you can pay towards your debts and make offers of repayment on your behalf. So instead of you making payments to a number of different creditors separately, you will make one payment to your debt management company.
Typically it does cost money to have a debt management plan which is paid out of your available surplus income. There are also free alternatives which you can find out about on this blog.
Once your plan is up and running you typically don’t hear much from your creditors although they may contact you from time to time to request a higher payment. When this happens you would let your debt management company know and they would normally take care of it for you.
Checking a Debt Management Plan is the best solution for you
A Debt Management Plan might seem like the best solution for you but it could be that others solutions are more appropriate for your debt problem. When you contact an organisation for help with your debts they may discuss other solutions such as an IVA or maybe even Bankruptcy if things are that bad. It all depends on how much debt you have and whether it is likely you will repay it or not.
The aim when solving your debt problem is to resolve the situation in the shortest amount of time possible. There are advantages and disadvantages for each debt solution so it is important to get the right kind of advice before committing to anything.
Below are some links to find out more information about some of the more common debt solutions: –
- A Debt Management Plan vs an IVA.
- The Pros and Cons of an IVA.
- The Pros and Cons of Bankruptcy.
- The Pros and Cons of a Debt Management Plan.
Start sorting out your Debts today
If you are now ready to talk to someone about your debt you can visit the Debt Help page to find details of organisations who can help you. Best of all they are not there to make money from you and you won’t pressured into anything. Good luck with sorting out your debts.