If you’ve got into trouble with debt then you’re not alone. Consumer debt in the UK is at record levels and hundreds of thousands of us are looking for debt help and a way out.
There are many options for dealing with your debt, including debt consolidation loans, Individual Voluntary Arrangements (IVAs), bankruptcy and more. One option that’s available is entering a debt management programme. Let’s take a look at what’s involved in undertaking debt management in this way.
The first thing to consider is whether your situation really merits undertaking a debt management programme. If you have only a few creditors and you think you will be able to repay them in a short time, then this might be the right option for you. On the other hand, if your debts are more than £20,000 and it’s likely to take more than five years to repay them, then you may need to consider an IVA instead.
Getting Started With Managing Your Debts
To get started with a debt management programme, you need to contact a debt consultant who will review your income and outgoings. The debt consultant will look at what you owe to whom, and how much you can reasonably be expected to repay. This repayment figure takes into account your need to have money to live on and run your household. The consultant will consolidate your debts into a single sum and will make a repayment offer to your creditors.
As part of the deal with creditors, they must agree to stop charging interest on the outstanding debt and to stop any action to recover the debt. This means that you won’t risk losing your home or possessions, as long as you stick to your part of the deal. The offer to creditors is made in writing and they must all agree to it. If they don’t you could end up being charged interest or having default notices and County Court Judgements on your credit file.
Most creditors will go along with a properly drafted repayment plan. Your consultant usually handles the administration as well as regular reviews. That means that you pay the consultant and the consultant pays the creditors. Debt management could be a realistic option if you are able to make a payment arrangement and stick to it. It’s a good solution for debts that won’t take too long to repay. Choose a professional debt management company to get started with becoming debt free.
