Getting into debt is unfortunately very easy to do, but getting out of debt can be a much more difficult task. Being in debt is unpleasant and unmanageable debt can lead to stress, loss of sleep and a serious loss of enjoyment of life in general. Debt is a very personal thing to many people and it can be embarrassing to admit that you’ve got into debt you can’t get out of. There is no shame in this, however, and there’s a variety of resources available to help you if you need it. One of the best ways of managing debt is through a debt management plan. If you’re in debt that is causing problems and are in need of help, then read on to find out why you may want to consider a debt management plan.
Considering a Debt Management Plan
A debt management plan is designed to ease the burden of debt repayments by reducing the amount you have to pay and allowing you to pay it over a longer period of time. The system enables you to pay off your debts to your creditors by making regular payments to a third party debt management company, who then pay all your creditors on your behalf. It is much easier to manage debt by making one single monthly payment rather than paying many smaller, individual debts. This way each creditor gets paid each month as long as you stick to the plan.
Stick to the Plan
The debt management company will decide the amount that you must pay each month and this will be assessed after taking into account your financial situation. As part of the process the debt management company will contact your creditors on your behalf and negotiate a payment plan that you can afford but it’s up to each creditor as to whether they’ll agree to the plan. None of your creditors are obligated to agree to the proposed debt management plan. If agreement is reached then you will need to pay back this amount consistently and on a regular basis so make sure that it’s an amount you can afford. Missing payments on a debt management plan can lead to loss of faith by your creditors and might result in your debt being passed on to a collection agency, so pick an amount you can afford and be serious about repayments.
Be Aware of what you’re signing up to
Be aware that a debt management company does not offer their services for free. You may be charged a fee to setup the plan and will be charged a fee on each payment you make. Make sure you’re aware of these fees and only go with a debt management company that is authorised by the Financial Conduct Authority. Fortunately the FCA has a register of authorised companies so you can verify their credentials in advance.
Debt is extraordinarily common in this day and age and many people are living with unmanageable debt when they don’t have to. The pressures of debt are known to cause serious health and family problems and it can often seem like there’s no way out. The answer is to seek professional debt advice and whilst it may wound your pride to seek debt advice but it’s the right thing to do.
A professional debt advisor is used to sorting debt problems and will almost certainly be able to sort yours and a suitable debt management plan is just one of the options that will be assessed on your behalf. The important part to all of this is to find the best debt solution for your particular problem and one that suits your individual circumstances. So take the appropriate action and get on the road to sorting out your debt and put your life back on track.