Debt management plans

Debt management plans have been utilized by tens of thousands of people over the past 15 years or so who have been struggling to meet repayment demands on debts over £4000. As creditors are bound by regulations to assist their customers in making repayments and being responsible lenders they are normally happy to assist in entering into a debt management plan.

Debt management plans are arranged by specialist advisors who after conducting an affordability assessment with you will contact your creditors and request that a new payment plan is set up to within your budget. They will also request that any interest and charges are immediately frozen and that no further demands are made or default notices issued. Local debt management plans company united kingdomOnce the creditors are in agreement you will be required to make one affordable monthly payment for a predetermined period of time.  These payments will be distributed to your creditors each month and a percentage will be taken as an administration fee by the plan arranger.

While DMP’s are a legitimate and effective way of regaining control of your finances and relieving the stresses that come with dealing with creditors every month there are points to note which your plan arranger will make you aware of before completing any work on your behalf. The major points are that your credit rating will be affected for 6 years after any default notices are issued, default notices may be issued over the course of the plan and your overall payment term may increase.

You should also be aware that unlike individual voluntary arrangements, debt management plans are something you are able to attempt to arrange yourself although this can be difficult and time-consuming without the assistance of professionals. Again please speak to your advisor about the benefits of using their service and utilizing their experience. For many people, the thought of having someone to deal with creditors on their behalf is a huge benefit of this service reducing unwanted stress and anxiety these situations can bring.

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