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You may be surprised at how much you can achieve without the help of a debt management company. Many people negotiate reduced payments with their creditors even getting them to freeze interest and charges on their accounts. If you have decided to go it alone, the following article will provide you with valuable advice on how to do this successfully.
Debt Management Plan
So, what is a debt management plan (or programme)? You’ve been told it is the solution to your debt problems, the light at the end of the tunnel, but what exactly is involved? More importantly, how much does it cost?
What is a debt management plan?
A debt management plan is a method by which you can make affordable repayments to your creditors each month. In brief, you decide exactly how much you can afford to pay, create a payment plan based on this and negotiate the plan with your creditors (personally, or by means of a debt management company).
This plan does not need to include all of your creditors. It is completely voluntary so it is entirely up to you which creditors you want to negotiate with and how much you want to offer (just remember to be realistic).
Additionally, many creditors also agree to freeze most, or even all of the interest. This means that your debts are repaid even quicker.
Why would creditors accept the debt management plan?
Your creditors do not have to accept your offer of repayment. However, many creditors are prepared to accept reduced payments when the offer you are making is reasonable and you can demonstrate that you are committed to repaying your debts.
It is usually in the best interests of creditors to accept these arrangements as failure to do so could result in the debt becoming so overwhelming that you have to resort to something like bankruptcy. At least with a debt management plan they are more likely to get something back.
How much does a debt management plan cost?
The costs involved with debt management plans can vary considerably. Read our ‘How Much Does a Debt Management Plan Cost?’ article for more information.
What to do now
If you would like more information on debt management plans and other related topics, use some of the helpful links below. Alternatively, visit our comprehensive directory for a list of companies offering debt management services.
Helpful debt management plan links
How much does a debt management plan cost?
Negotiating with creditors
How can a debt management company help me?
Debt management alternatives
Debt management DIY
Remember, Debt Advice 4 Free is a completely free, impartial service. Although the information on this website is provided by industry experts, it should never replace the advice of a debt adviser who understands your individual circumstances. You can visit the directory section of this website to find a list of companies offering these services.
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What is debt consolidation?
Debt consolidation simply means replacing multiple loans with one new loan. If you have debts with different creditors, you can combine them into one loan using a debt consolidation loan.
Find out more about debt consolidation here >>