If you have found yourself deeply in debt to either one or many creditors, and dread the thought of claiming bankruptcy, a debt management plan may be just the solution you’re looking for.
You can reduce your total debt payments to as little as £100 per month, and you’ll no longer have to deal with the stress of creditors endless phone calls and attempts to bully you into sending them money.
What Is A Debt Management Plan
A debt management plan (DMP) is a contract made with your creditors, mediated by a debt management specialist, to alleviate your stress of high term payments.
Your unsecured debts are consolidated into one monthly payment, the amount of which is determined by what you can realistically afford. This smaller monthly payment will then be divided evenly amongst those you owe money to.
When you successfully complete a debt management plan, your debts will be forgiven and you’ll never have to hear from creditors again.
Unsecured Debts Only
Although a debt management plan is an excellent alternative to claiming bankruptcy, it cannot be used for renegotiating debts leveraged against assets such as property or vehicles.
The only debts that are eligible are your “unsecured” debts, such as credit cards and others that aren’t “secured” by property, such as a house or car.
More Benefits Of Debt Management
The goal of a debt management plan is to both maintain a living standard for yourself, while guaranteeing creditors your intention of paying your debts in full.
Since debts are rolled up into one affordable payment each, most people find it liberating to not have so many bills to juggle each month. You’re better equipped to manage your finances knowing you can meet the payments without worry.
In addition, creditors will often waive interest charges altogether, and stop any attempts to sue you in court. However, creditors aren’t legally bound to do any of this, and they may not even agree to enter into the debt management contract at all.
Your Expert Negotiator, the Debt Management Specialist
It is extremely important to work with the right person to negotiate with creditors on your behalf and get them to agree to the best terms. While a DMP is an excellent debt management solution to increase the ease with which you pay your monthly bills, it will increase the time it takes to pay back all your creditors in full. An expert can negotiate the finer details of the contract to ensure there are no surprises and that both parties interests are served.
The debt management specialist who negotiates with your creditors is working completely in your best interests and will always fight for you, your money, and your living standard. The right debt management specialist will fight to have any future interest accumulating on your debt frozen permanently.
Choosing a debt management specialist for you and your finances is the most important step of creating a DMP, but it is not difficult.
When You Owe More Than £15,000
If you owe more than £15,000 to creditors, you will most likely need an Individual Voluntary Arrangement, rather than a DMP. The process of reaching an IVA is a contractual agreement and requires an Insolvency Practitioner. An IVA has the same benefits as a DMP over claiming bankruptcy, and ensures that you maintain control over all of your physical assets.
