What is a debt management plan?
If you are struggling to meet your credit card and loan repayments a debt management plan is one way you can take control of your finances without taking out further loans. A debt management advisor will look at all of your income and outgoings to see what amount you can afford to re-pay your creditors each month. They then contact all your creditors on you behalf and negotiate new affordable repayment terms, turning your debts into one affordable monthly payment. All the paperwork and calls to creditors are taken care of for you.Reducing the amount you pay to your creditors will make paying off your debts take longer but debt management advisors can often freeze or reduce interest payments. Paying off your debts more slowly will increase the amount that you pay back and although your credit rating will improve in the long term entering a debt management plan could result in your creditors issuing a default notice which could affect your ability to obtain credit.
