During a recession, a lot of households will be facing a hard time, so how could a management plan help? Many people choose to manage their debts on their own.
However, others prefer to let a professional finance company handle their unsecured debts for them.
When someone enters a management plan through a professional management company, the company will - on the individual's behalf - negotiate with their unsecured creditors, asking them to accept lower, affordable monthly repayments, and, where possible, to reduce / freeze interest and waive charges.
However, bear in mind that creditors aren't legally obliged to accept any changes to their original repayment agreements.
Also, note that different management companies may offer different kinds of services, so you'll need to know what you're signing up to before you agree to anything.
Debt management plans aren't dependent on credit availability or house prices - factors which could make other debt solutions, such as debt consolidation loans, more expensive and / or harder to obtain at a time like this.
Plans involve negotiating with lenders, making sure they're aware that you're unable to repay your debt at the rate to which you had originally agreed.
So these plans are only suitable for people who cannot afford their monthly debt repayments.
Who are debt management plans suitable for? Debt management plans aren't suitable for everyone.
For example: 1.
If you can make the agreed repayments, debt management would not be appropriate for you.
2.
If you don't think you'll be able to repay your debts in a reasonable period of time, debt management would not be suitable.
Please bear in mind that if you decide to enter a debt management program, you will be defaulting on your original repayment agreements - which will show up on your credit report for 6 years, meaning access to further credit may be limited and/or more expensive for this time.
Plus, if you arrange to repay your debts over a longer timeframe, you may repay more overall - due to interest.
If you are considering entering a management plan, and would like to find out if it would be the right choice for you, you should speak to a professional debt adviser.
However, others prefer to let a professional finance company handle their unsecured debts for them.
When someone enters a management plan through a professional management company, the company will - on the individual's behalf - negotiate with their unsecured creditors, asking them to accept lower, affordable monthly repayments, and, where possible, to reduce / freeze interest and waive charges.
However, bear in mind that creditors aren't legally obliged to accept any changes to their original repayment agreements.
Also, note that different management companies may offer different kinds of services, so you'll need to know what you're signing up to before you agree to anything.
Debt management plans aren't dependent on credit availability or house prices - factors which could make other debt solutions, such as debt consolidation loans, more expensive and / or harder to obtain at a time like this.
Plans involve negotiating with lenders, making sure they're aware that you're unable to repay your debt at the rate to which you had originally agreed.
So these plans are only suitable for people who cannot afford their monthly debt repayments.
Who are debt management plans suitable for? Debt management plans aren't suitable for everyone.
For example: 1.
If you can make the agreed repayments, debt management would not be appropriate for you.
2.
If you don't think you'll be able to repay your debts in a reasonable period of time, debt management would not be suitable.
Please bear in mind that if you decide to enter a debt management program, you will be defaulting on your original repayment agreements - which will show up on your credit report for 6 years, meaning access to further credit may be limited and/or more expensive for this time.
Plus, if you arrange to repay your debts over a longer timeframe, you may repay more overall - due to interest.
If you are considering entering a management plan, and would like to find out if it would be the right choice for you, you should speak to a professional debt adviser.