Why Debt Management?

Debt management is exactly what is suggests, it is a management system for your debts negotiated with your creditors by experts, without the need for further borrowing.

Many people have been there! At some stage, mortgage, credit cards, loans, catalogue payments all needing to be repaid by the end of the month and the money’s just not there! – ‘til next week! Late payments mean heavy charges and may well be registered against you with credit reference agencies, which in turn makes obtaining further borrowing increasingly difficult. This and many other circumstances can easily result in mounting debt getting out of control.

Ever asked yourself how you can get yourself out of this situation without taking on more borrowing commitments, even if you could get it?

Taking out another loan to cover all your existing debts isn’t always possible and may not be the best solution. Because as the total debt goes up against your earnings making the affordability more doubtful, generally, so does the interest charge on the consolidation loan. This just makes a bad situation worse. There is another solution in the form of debt management.

There are management companies that are skilled in dealing people in debt, offering expert advice and if possible, proposing an alternative solution that will not only offer you one affordable monthly repayment but will cut your outgoings down to a payment which meets your individual needs.

The debt management company will need to establish whether or not you qualify for a personal management program. In order to do that they will take details of your income and expenditure, together with information of who you are in debt too and endeavor to produce an individual plan to suit your circumstances.

If you fit the bill, (and your situation has to be really precarious for you to be beyond assistance from debt management) the information you provided will be used to create a solution for you to consider. The draft solution will detail your possible monthly payment, an estimate of the time you will need to be on the program and the saving you may achieve each month by entering into the program.

After you have agreed the with the proposal, including the commitments that it suggests, with your permission the company will contact each of your creditors confirming up to date balances, prepare an accurate financial statement and using their expertise, make a formal offer of repayment to each creditor.

Once agreements have been concluded with creditors, your payments under the plan can begin. The management company will continue to negotiate with each creditor, keeping you up-to-date with the state of your debts and reviewing with you to see if you are able to increase your payments as your circumstances may have improved, which means you will be reducing the time you will be on the plan, saving you more money again.