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Below you will see information on Debt Management.



What is Debt Management?

Debt management is offered by qualified insolvency practitioners and expert debt advice companies. When a person falls into debts which are unmanageable – for example, there might be two or more creditors asking for money – a debt management company can help that person find a solution. They might do this by carrying out a means test, so that they can find out how much you can actually afford to be paying back on a monthly basis. This is especially useful for people whose financial circumstances have changed due to a job loss or pay cut.

Once a debt management company has looked a person’s individual case and circumstances, they can work out a debt plan. This might involve freezing interest and gathering debts into one affordable monthly repayment. In addition, they may negotiate with that person’s creditors on their behalf.

Who can get a Debt Plan?

You can get a plan if you have around £1,000 or more in debts. Make sure you check what the minimum debt requirement is from a debt management company – they may ask that you have more than £1,000 in debts. In addition, you might need to prove that you have more than two creditors. There may be other requirements such as age/employment, but this will be explained to you in detail by a debt management company. The initial application is generally straightforward and can be done online.

What are the Benefits of Debt Management?

Seeking debt management from a qualified company is a great first step to a debt-free future. Rather than ‘sticking your head in the sand’ and ignoring the problem of severe debts, you are looking for a way out – this is always a positive step! A debt plan is a great alternative to an IVA and you do not need to be in as much debt as an IVA requires you to be.

The fact that your creditors are negotiated with by a professional acting on your behalf is a great advantage, as is the possibility of interest being frozen. However, it is important to remember that your overall debts will not go down/go away from a debt plan.

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