If your debts are growing exponentially and working your way out of financial trouble feels like catching sand, then an intelligent debt management plan could be one solution to your woes. Without the far-reaching repercussions brought about by declaring bankruptcy, Debt Management can help realign your debts into a manner which can be plausibly paid back within your limitations and ensure that your creditors are satisfied.
With nine millions Brits currently in serious levels of debts, creditors are more inclined to seek alternative methods of repayment to ensure that the debtors can successfully pay back the money they are owed. The Money Advice Service (MAS) has revealed that many of those in debt are still ignoring alternative measures and professional help to make the repayments.
Working alongside a debt management advisor, you will be able to determine a truly affordable rate of repayment to all of your creditors. This level of repayment will ensure that you retain enough income to exist on and not plunge your further into debt. Your advisor will then negotiate with all of your advisors until everyone is satisfied with the amount of debt that is being repaid.
You will then pay one regular centralised payment to the advisor and they will split the money accordingly amongst the creditors. Your creditors may be inclined to accept this reduced level of repayment as it will remove the responsibility on their part to pursue the debt, allowing them to simply receive the payments.
An InControl debt management advisor will also move to request that all interest and charges to cease on the repayments. The creditors are not obliged to do this, but may choose to do so if they believe it will help smooth the repayment process. If this request is successful, it could significantly reduce the total amount of repayment that you are obliged to make.
The level of repayment will be reviewed every 6 months to determine whether the circumstances of any of the parties have changed and a new repayment plan may be preferable. If the debtor has suffered from a decrease in income, then a lower rate may be agreed upon. Alternatively, if the debtor has enjoyed a financial boon, then a new rate of payment may be agreed upon to increase the process.
A Debt Management Plan must be scheduled to conclude within 10 years. This will mean that within the decade you could be completely debt-free and able to plan for the future once again.
You could qualify for a Debt Management Plan if your debts are above £1,000 and you owe money to two creditors or more. You will need to be able to provide proof on an income with a disposable income of at least £80 that can go towards paying off the debts.
As well as relieving your level of debt, a Debt Management Plan can also move to relieve the stress placed upon you by creditors chasing their money. They are legally obliged to not contact you in relation to the debt payments covered in the plan. Another factor towards helping you get back to a normal, peaceful life.