Debt Management

What is a Debt Management Plan?

A Debt Management Plan, or Creditor Arrangement, is an informal arrangement between a person in debt (a debtor) and the people or organisations to which they owe money (the creditors), such as banks, credit card companies, catalogues etc. A Debt Management Plan can be used to reduce monthly payments to unsecured debts. Unsecured debts are those that are not secured against a property or other asset that could be repossessed if repayments are not maintained.
How does Debt Management Plan work?
A debt counselling company, like Suitable Debt Solutions, can work out a Debt Management Plan for you. The way this works at Suitable Debt Solutions is that your personal debt counsellor will work with you to produce a detailed budget of all your regular household expenses in order to arrive at a sum that you can afford to pay each month towards your debts.
Each month you make a payment to your debt management company who will share this money between your creditors. Your debt counsellor will deal with all correspondence between yourself and your creditors and will maintain regular contact with them to make sure they are fully informed of your efforts to pay off your debts. Your debt management company will also keep in regular contact with you to offer you all the support and advice you need to stick to your budget and keep making positive steps towards clearing your debts.

How long will it take to pay off my debts?

This depends on how much you owe. Unlike other debt solutions, a Debt Management Plan will continue until all debts are paid. It is our aim to help you clear your debts as quickly as possible, but it is also important that you do not make commitments to pay sums that you can’t afford and your debt management counsellor will help you to achieve the right balance.
Can I pay off my debts quicker?
If your circumstances change, for example if you get a pay rise or inherit a sum of money, your Debt Management Plan can be adjusted to take this into account and your debts paid more quickly.
Full and Final settlements can be arranged with your creditors if you have access to a lump sum which can mean that you can save many thousands of pounds.
If you have equity in a property, in certain circumstance it can be used to pay off your debts more quickly than other forms of debt management, however this is a very big step to take and it is therefore imperative that you seek professional advice before taking any action.
What are the advantages of a Debt Management Plan?
Entering into a Debt Management Plan provides you with the peace of mind that comes from knowing that your debts are being dealt with in a structured way. • You make a single payment to your debt management company rather than lots of payments to different creditors. • The debt manager will keep in contact with all your creditors so that you don’t have to deal with letters and telephone calls from them. • Your creditors will be much more sympathetic towards you when they know that you are serious about clearing your debts and have sought professional help. • In most cases, once you have entered into a Debt Management Plan your creditors will freeze the interest, preventing the debt from escalating. • Your debt management counsellor will provide all the help and support you need to stick to your plan.
Are there any disadvantages with a Debt Management Plan?
A Debt Management Plan is not the solution in every case. • A Debt Management Plan is not a legally binding agreement and the onus is therefore on you to stick to the payment sum you have agreed with your debt counsellor. • Whilst creditors usually agree to freeze additional interest once you enter into a Debt Management Plan, this is not always the case and cannot be guaranteed. • Depending on your income and the amount you owe it can take a considerable time to clear your debts. • Creditors can still pursue you for repayment of outstanding balances including taking legal action against you.

Why should I ask Suitable Debt Solutions to arrange my Debt Management Plan?
In some circumstances a Debt Management Plan is the best way to clear your outstanding debts; in other cases it can form part of a larger and more complex debt solution. At Suitable Debt Solutions we can advise you whether a Debt Management Plan is right for you.
Having agreed that a Debt Management Plan is the right solution, your personal debt counsellor will work with you to ensure that the arrangements put in place are manageable and affordable for you whilst satisfying your creditors that you are making every effort to pay what you owe. We will then support you every step of the way, giving you all the help and advice you need to stick to the plan, clear your debts and be able to face the future debt free.
For many people, Debt Management Plan is an ideal way of dealing with debt problems and facing the future debt-free. However, it is not always the most appropriate debt solution and should therefore not be entered into lightly. It is imperative that each individual with a debt problem receives specialist advice to ensure that they are offered the best debt management solution, or combination of solutions, for their particular circumstances.
To find out if a Debt Management Plan is right for you, call Suitable Debt Solutions today on 0800 082 60 50.