Topic: finance
If, like many people you are having problems repaying your unsecured debts then one option that you may have open to you is a debt management plan.
A debt management plan works by you (or the debt company that you’ve decided to use) contacting lenders and making them aware that you are unable to meet the monthly payments which they require and that you wish to make payments which are lower.
These new payments your making should be practical and affordable, leaving you with enough income to pay your rent, food and other essentials but at the same time paying as much back as possible.
You will simply be paying as much as possible, without having to dig into funds that you really need.
As a debt management plan is an agreement which is flexible, your creditors are not bound by law to accept the agreement – they are free to reject it. Repaying your debts at a different rate than initially agreed will also mean that it’s going to take more time to pay all of your debts back. Bear this in mind before hand. Another factor to consider is that it can also cost you more in interest, but if you’re using a debt management company they will also try to persuade lenders to freeze and rates and charges.
Something else to consider is that you credit rating can be affected, as you are not sticking to the original contract. If you have debt problems anyway, then there is a good chance that you have a poor credit rating anyway and seeking a solution such as a debt management plan is a step in the right direct to taking action.
To read more on the benefits and drawbacks of debt help, check out our website.