Pay Only What You Can Afford
One affordable monthly payment
Interest and charges can be frozen
Don’t borrow more money!
Debt Management can often help manage your debts into one affordable monthly payment.
Debt Management is a process in which a debt management company or free debt agencies such as the citizens advice bureau help you negotiate with your creditors to accept a lower monthly payment provided you are struggling to repay your debts.
Debt Companies will use a financial statement to prove you are struggling with your repayments and act on your behalf to negotiate with your creditors to request interest and charges are frozen.
Advantages
The key advantages of a Debt Management Plan are that you often pay one lower monthly payment from your bank to a Debt Company. Another advantage is that the hassle of communicating with all of your creditors is handled by a Debt Company for you. They will also will attempt to have the interest payments frozen on your loans, credit cards and store cards. You will only ever pay to your creditors what is considered to be affordable once your essential living costs have been taken into account. This way, you should always be able to pay your essential living costs first.
Debt Management may not be for everyone and if your debts are higher than £7,000 then you may want to consider an alternative solution such as an IVA. If this is the case then you may want to consider applying for an IVA. You can find out more about IVA’s here.
Debt Management can have an adverse affect on your credit record. Also it will take longer to pay back your credit due to the fact that you are paying less back to your creditors each month. Only unsecured debts can be included in a debt management plan.
One affordable monthly payment
Advantage
You will only pay what you can realistically afford
Your creditors are dealt with on your behalf
Advantage
The hassle of dealing with your creditors is handled for you.
Reduce payments to creditors
Advantage
Your monthly payment can often be lower than your previous creditor payments.
Interest and Charges reduced
Advantage
A request is made to have your interest and charges reduced or frozen.
Disadvantages
It is fair to say there have been some bad press about Debt Management and how it has left some people in more debt than when they first started. There are certain facts to consider before entering a Debt Management Program.
No obligation
Disadvantage
Creditors are not obliged to agree to a Debt Management Plan nor freeze interest and charges.
The right schedule
Disadvantage
Sometimes rescheduling your Debt payments can lead to an increase in the total sum that you will need to repay your creditors and can extend your repayment period. Debt advisors should advise you an estimate for the total repayment period and length of time for the plan subject to your creditors accepting the arrangements.
Keeping up your repayments
Disadvantage
Failure to keep up your repayments once on a repayment plan is set may result in arrangements with your creditors to be broken meaning interest and charges may be added to your accounts.
When creditors are paid
Disadvantage
Your creditors will be paid from month one after deductions have been made for setup fees. Your Debt Management setup fees will be taken evenly over the first 4 payments.
Further information
You could be paying off your debt for a very long time; this is largely because your creditors may not freeze the interest payments. This could lead to a very long debt repayment period. Discuss this with your advisor first.
Whilst you are on our Informal Payment Plan, the payments that are made to your creditors will be lower than the contractual payments. Your creditors may register the missed payments or reduced payments on your credit file. This will almost certainly stop you from obtaining further credit whilst the credit that you already have with them is being paid.
Consolidators Ltd spread the cost of their set-up fees evenly across the first four months. They have to assure creditors that all the repayment plans they put forward for consideration are sustainable.
OK, so now you have the key facts about Debt Help, would you like to know more? Feel free to contact us at any time and a selected debt advisor can talk you through the options without obligation.