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debt management

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A debt management plan could be very useful for someone who is struggling with relatively small amounts of debt normally below £15,000.
 
A debt management plan, put simply is a solution that allows you to pay back your debts at a rate that you can afford.
 
Basically you agree to pay a monthly payment to your debts based on what you can afford rather than what your creditors are demanding you pay. In order to determine what your payments would be we would look at your monthly income and then all of your essential expenditures e.g. rent or mortgage, food, utilities, travel etc and then what ever was left over would be put towards your Debt Management Plan.
 
The monthly payment would then in turn be evenly distributed amongst your creditors. You will continue to make this payment until your debt is satisfied.
 
In return your creditors may agree to stop your interest and charges, refrain from chasing you for further for increased payment and of course agree to accept reduced payments.
 
Benefits of a DMP:

  1. Interest and charges can be stopped.
  2. Your debt repayments become affordable.
  3. You only have to make one payment every month which helps with organisation and budgeting.
  4. You have the flexibility to adapt your DMP easily as your circumstances change or even cancel it if you feel you no longer need one.
Downsides of a DMP:
  1. A DMP can affect your credit rating.
  2. You may have to pay your debt back over an extended period of time.
  3. The service you get from DMP providers varies dramatically so it is vital to make sure you choose the right one.
It’s always wise to talk with a specialist about how they can help you to become debt free as everyone's situation is unique and needs specialist free debt advice so why not speak with the National Debt Trusts recommended debt help specialists and see how they can help you.