Repay Debt with a Debt Management Plan
It is possible to repay debt with a debt management plan and become debt free. A debt management plan is designed for individuals who are struggling to manage multiple debts and find themselves falling behind on repayments. A debt management plan can combine all of your existing debts into one lower monthly payment, this should mean you can take control of your finances much more easily as you only have to make a single monthly payment to us, which we will distribute between your creditors.
There are a number of potential benefits when you repay debt with a Debt Management Plan, including:
- It should be easier for you to repay one single reduced payment to your debt management plan rather than managing multiple debts.
- You don’t have to worry about your unsecured creditors as we will deal with them on your behalf.
- We may be able to freeze interest and charges on the debt although this cannot be guaranteed.
You will have to repay the full amount of debt with a debt management plan as it offers you no percentage of debt write off, therefore it could take you longer to repay the debts as you are making a lower repayment at a rate that is affordable to you.
If you have debts over £12,000, you may consider repaying debt with an IVA. An IVA is similar to a debt management plan where you make a lower monthly payment but it offers some additional benefits. It is a legally binding contract between you and your unsecured creditors which means, when agreed, they cannot revert back on the arrangement. It also allows a certain amount of debt write off so you only repay the debt that is affordable to you over a 60 month period.