Why Choose a Debt Management Plan?
How Debt Solutions Can Alleviate Financial Difficulties
Jan 24, 2009
When financial difficulties set in, creditor harassment from debt collection agencies can become an overwhelming burden. A debt solution, such as an Individual Voluntary Arrangement, personal bankruptcy or Debt Management Plan, can help to negotiate serious debt problems.
What is a Debt Management Plan?
It allows someone with financial difficulties to put all unsecured debts under one roof. This does not include the mortgage or any secured loans. Monthly payments start from as little as £100; management fees usually amount to 15% of contributions.
Creditor Harassment
Whilst only a voluntary agreement, it helps prevent creditors calling. All negotiations are performed by a professional account manager, thus alleviating much of the pressure.Debt Management Plans mean that answering the door or phone is no longer something to be dreaded.
Affordability
It is possible to make payments into a Debt Management Plan starting from as little as £100 per month. This can help considerably with financial difficulties as many people with credit card debt are struggling to make just the minimum monthly payment for several times this sum.
An Individual Voluntary Arrangement normally requires a minimum contribution of £250 per month. This is due to the level of debt being greater than that associated with a Debt Management Plan, as well as the cost of the Insolvency Practitioner.
Not Legally Binding
It is a more flexible debt solution than an Individual Voluntary Arrangement or personal bankruptcy. This means that a debtor can adjust their level of contribution should their personal circumstances change for the better or worse.
Professional Account Manager
Signing up means that a professional account manager now represents that person. They not only stop creditor contact, they also ensure that all payments are sent out. A person with financial difficulties now has someone to turn to.
A Debt Management Plan is the right debt solution for dealing with smaller debts. It not only provides an easier way of negotiating any financial difficulties, it also helps prevent creditor contact. Those with debts of in excess of £15,000 may wish to consider an Individual voluntary Arrangement or personal bankruptcy.
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