Using Debt Management Plans to be Debt Free

Debt Management Plans allow to consolidate all of your debt into the debt management plans which leaves you with one lower monthly payment to make which will cover all of your debt. This new monthly repayment is typically much  lower than what you were paying to your debts beforehand.

Using debt management plans to be debt free is an alternative to debt consolidation loans, as this type of plan does not involve borrowing any more money. Therefore your debt burden should not increase and you can concentrate on repaying these debts and becoming debt free.

A debt management company can organise a debt management plan on your behalf. They will contact your unsecured creditors to agree new deals on how you repay your debt, ensuring that it is at a level you can afford. Some creditors are also willing to freeze additional interest charges and some fees on your unsecured debt. Although it will take you longer to repay your debt because you are making smaller monthly payments, an important point to remember is that you will paying a sum which you can afford.

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Once your debt management plan has ben agreed, all you need to do is make this single payment to the debt management company. This money will then be distributed to your creditors as agreed. You don’t have to worry about multiple creditor repayments any more, all you need to do is ensure you make the payment to your debt management plan. You should have no trouble making this payment; a debt management plan is tailored to your individual circumstances to ensure that it is affordable to you.

Using a debt management plan to be debt free usually means that you will have levels of unsecured debt under £12,000 which you owe to three or more creditors. Your unsecured debt could be in a number of different forms, such as credit cards, store cards, personal loans or bank overdrafts.

If you have debt over £12,000 then you should contact your debt management company to see if your circumstances are suitable for an IVA. Not everyone is eligible for an IVA, so you will need to seek professional debt advice regarding this. An IVA is an alternative to a debt management plan and bankruptcy. It allows you to make reduced and affordable monthly payments to your creditors and, on successful completion of the IVA, any unpaid debt will be written off.

For expert debt advice about using debt management plans to be debt free, please contact one of our expert debt advisors now by filling in the Quick Enquiry Form to the right hand side.