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Debt Management Plans - Explained
[CENTER][COLOR=#ff8000][SIZE=5]Debt Management Plans - Explained[/SIZE][/COLOR][/CENTER]
A Debt Management Plan is an affordable repayment programme set up by The Debt Management Company of your choice. If you're struggling to pay credit cards, loans, store cards or catalogues and would like someone to help sort out your payments and talk to creditors for you, also being able to pay one affordable amount to all your creditors each month then a Debt Management Plan may be just the thing - see [URL="http://forums.all-about-debt.co.uk/viewtopic.php?f=32&t=15"]Debt Management Companies - In Detail[/URL] for full details of the free DMC's.
[LIST][*]They help you work out what you can afford to pay each month[*]You pay this amount to the Debt Management Company[*]The debt management company pays your money to all your creditors for you[/LIST]
[SIZE=5][COLOR=#ff8000]Who can use the service?[/COLOR][/SIZE]
Anyone who can answer Yes to these 3 questions:
[LIST][*]Do you have debts of £5,000 or more?[*]Do you have 3 or more individual creditors?[*]Do you have £100 or more disposable income per month?[/LIST]
[SIZE=5][COLOR=#ff8000]How does it work?[/COLOR][/SIZE]
First you need to put together a personal budget sheet to see whether you have enough disposable income. Add up all your household income. Then add up all your essential expenses, like rent, mortgage, household bills, food, travel, child care. Take the outgoings from the income and what you have left over is your disposable income. If your disposable income is £100 or more, a Debt Management Plan might be a good option for you.
[SIZE=5][COLOR=#ff8000]Is it the best option for me?[/COLOR][/SIZE]
A Debt Management Plan is a good option for people who can afford to make regular payments to their creditors and want an easy, hassle free way to pay. This website does not give the advice required to make a sound assessment of whether it would be best for you, so take a look at [URL="http://forums.all-about-debt.co.uk/viewtopic.php?f=32&t=15"]Debt Management Companies - In Detail[/URL] for a list of free DMC's that may be able to offer expert advice and will be able to give you more information about Debt Management Plans as well as advising you on Bankruptcy, Individual Voluntary Arrangements and self-help options for dealing with your debts.
[SIZE=5][COLOR=#ff8000]How do I know whether a Debt Management Plan is right for me?[/COLOR][/SIZE]
A Debt Management Plan is a debt solution for the following types of people:
[LIST][*]Anyone who has unsecured debts that they can't afford to repay[*]People who have lots of equity in their properties but do not want to remortgage or take out a secured loan[*]People who do not qualify for an Individual Voluntary Arrangement (IVA). This would be for people with debts under £12,000[*]People that owe money to only one or two different companies[*]People who do not want their wives, husbands, partners or spouses to find out about their debts[*]People that just need a short term solution to their debts. For example they will be selling their house shortly so can pay off all their debts[*]People, who can, if they really push themselves, pay their debt in full but don't want to change their lifestyle[*]People who just don't want to deal with their debts and would rather use a third party to do it[/LIST]
[SIZE=5][COLOR=#ff8000]What are the advantages of a Debt Management Plan?[/COLOR][/SIZE]
In the area of debt elimination some people like the idea that they have a contract with the Debt Management Organisation, and believe that they therefore have more control over how their debts are treated:
[LIST][*]you will have almost instant access by phone to the Debt Management Organisation and will not have to wait to see someone[*]some people like the anonymity of a telephone service run by a Debt Management Organisation[*]you do not have to do any work in relation to your debts, for example, drafting letters to creditors[*]there is only one payment to make - to the Debt Management Organisation - and the company distributes the money to the creditors[*]you do not have to pay several different companies. Instead only one payment[*]if the plan is carried out successfully all Interest and charges are usually stopped[*]you only pay what you want to so that you have enough left over for a healthy social life[*]you will no longer need to speak to your creditors in order for debt elimination to take place[/LIST]
[SIZE=5][COLOR=#ff8000]What are the Disadvantages of a Debt Management Plan?[/COLOR][/SIZE]
If you are thinking of using a debt management company, you should be aware of the following:
[LIST][*]Debt Management Organisations are usually only interested in customers who have some available income and own their own home, so that the home can be used as surety against the debts[*]A lot of debt information is needed[*]Many Debt Management Organisations deal only with non-priority debts and you will have to deal with the more important priority debts yourself[*]If the Debt Management Organisation does deal with priority debts, it may not pay off priority debts before non-priority debts[*]Most Debt Management Organisations charge a fee which can be quite high. Fees can be typically about £200. This leaves you with less money to pay off your debts[*]Many Debt Management Organisations will expect a one-off deposit at the start of the agreement with the Debt Management Organisation, in addition to the fee you have to pay. This leaves you with less money to pay off your debts[*]Most Debt Management Organisations also charge an administration fee to the customer each month, to pay for the distribution of payments to creditors, in addition to fees and deposits. You need to check if it does and if so, how much it is. It may be up to £30 per month. This leaves you with less money to pay off your debts[*]You need to check whether, you can cancel at any time if you are not happy with the service. Check whether you will get your deposit back. You must insist that your Debt Information is returned[*]If the debts are rescheduled by the DMC, creditors may consider the account to be in default. Some Debt Management Organisations take all of the first months' payments as a fee. This puts the account into arrears by a month or more. These arrears will be recorded on your credit file[*]Most Debt Management Organisations do not give financial advice, and cannot advise on, for example, entitlement to benefit[*]Many Debt Management Organisations do not give financial advice and so do not give customers details of all the options open to them with the advantages and disadvantages of each[*]Debt Management Plans have no legal standing[*]If your monthly payment is low and your debts are high them you will most likely be in a plan for the rest of your life[/LIST]
[CENTER][COLOR=#ff8000][SIZE=5]* [SIZE=2]Debt management plans are subject to status. Conditions apply. Repaying the debt over a longer period may increase the total amount to be repaid. Your ability to obtain credit will be affected in the short term and might be affected in the medium term, fees are also payable for some DMP's.[/SIZE][/SIZE][/COLOR][/CENTER]
A Debt Management Plan is an affordable repayment programme set up by The Debt Management Company of your choice. If you're struggling to pay credit cards, loans, store cards or catalogues and would like someone to help sort out your payments and talk to creditors for you, also being able to pay one affordable amount to all your creditors each month then a Debt Management Plan may be just the thing - see [URL="http://forums.all-about-debt.co.uk/viewtopic.php?f=32&t=15"]Debt Management Companies - In Detail[/URL] for full details of the free DMC's.
[LIST][*]They help you work out what you can afford to pay each month[*]You pay this amount to the Debt Management Company[*]The debt management company pays your money to all your creditors for you[/LIST]
[SIZE=5][COLOR=#ff8000]Who can use the service?[/COLOR][/SIZE]
Anyone who can answer Yes to these 3 questions:
[LIST][*]Do you have debts of £5,000 or more?[*]Do you have 3 or more individual creditors?[*]Do you have £100 or more disposable income per month?[/LIST]
[SIZE=5][COLOR=#ff8000]How does it work?[/COLOR][/SIZE]
First you need to put together a personal budget sheet to see whether you have enough disposable income. Add up all your household income. Then add up all your essential expenses, like rent, mortgage, household bills, food, travel, child care. Take the outgoings from the income and what you have left over is your disposable income. If your disposable income is £100 or more, a Debt Management Plan might be a good option for you.
[SIZE=5][COLOR=#ff8000]Is it the best option for me?[/COLOR][/SIZE]
A Debt Management Plan is a good option for people who can afford to make regular payments to their creditors and want an easy, hassle free way to pay. This website does not give the advice required to make a sound assessment of whether it would be best for you, so take a look at [URL="http://forums.all-about-debt.co.uk/viewtopic.php?f=32&t=15"]Debt Management Companies - In Detail[/URL] for a list of free DMC's that may be able to offer expert advice and will be able to give you more information about Debt Management Plans as well as advising you on Bankruptcy, Individual Voluntary Arrangements and self-help options for dealing with your debts.
[SIZE=5][COLOR=#ff8000]How do I know whether a Debt Management Plan is right for me?[/COLOR][/SIZE]
A Debt Management Plan is a debt solution for the following types of people:
[LIST][*]Anyone who has unsecured debts that they can't afford to repay[*]People who have lots of equity in their properties but do not want to remortgage or take out a secured loan[*]People who do not qualify for an Individual Voluntary Arrangement (IVA). This would be for people with debts under £12,000[*]People that owe money to only one or two different companies[*]People who do not want their wives, husbands, partners or spouses to find out about their debts[*]People that just need a short term solution to their debts. For example they will be selling their house shortly so can pay off all their debts[*]People, who can, if they really push themselves, pay their debt in full but don't want to change their lifestyle[*]People who just don't want to deal with their debts and would rather use a third party to do it[/LIST]
[SIZE=5][COLOR=#ff8000]What are the advantages of a Debt Management Plan?[/COLOR][/SIZE]
In the area of debt elimination some people like the idea that they have a contract with the Debt Management Organisation, and believe that they therefore have more control over how their debts are treated:
[LIST][*]you will have almost instant access by phone to the Debt Management Organisation and will not have to wait to see someone[*]some people like the anonymity of a telephone service run by a Debt Management Organisation[*]you do not have to do any work in relation to your debts, for example, drafting letters to creditors[*]there is only one payment to make - to the Debt Management Organisation - and the company distributes the money to the creditors[*]you do not have to pay several different companies. Instead only one payment[*]if the plan is carried out successfully all Interest and charges are usually stopped[*]you only pay what you want to so that you have enough left over for a healthy social life[*]you will no longer need to speak to your creditors in order for debt elimination to take place[/LIST]
[SIZE=5][COLOR=#ff8000]What are the Disadvantages of a Debt Management Plan?[/COLOR][/SIZE]
If you are thinking of using a debt management company, you should be aware of the following:
[LIST][*]Debt Management Organisations are usually only interested in customers who have some available income and own their own home, so that the home can be used as surety against the debts[*]A lot of debt information is needed[*]Many Debt Management Organisations deal only with non-priority debts and you will have to deal with the more important priority debts yourself[*]If the Debt Management Organisation does deal with priority debts, it may not pay off priority debts before non-priority debts[*]Most Debt Management Organisations charge a fee which can be quite high. Fees can be typically about £200. This leaves you with less money to pay off your debts[*]Many Debt Management Organisations will expect a one-off deposit at the start of the agreement with the Debt Management Organisation, in addition to the fee you have to pay. This leaves you with less money to pay off your debts[*]Most Debt Management Organisations also charge an administration fee to the customer each month, to pay for the distribution of payments to creditors, in addition to fees and deposits. You need to check if it does and if so, how much it is. It may be up to £30 per month. This leaves you with less money to pay off your debts[*]You need to check whether, you can cancel at any time if you are not happy with the service. Check whether you will get your deposit back. You must insist that your Debt Information is returned[*]If the debts are rescheduled by the DMC, creditors may consider the account to be in default. Some Debt Management Organisations take all of the first months' payments as a fee. This puts the account into arrears by a month or more. These arrears will be recorded on your credit file[*]Most Debt Management Organisations do not give financial advice, and cannot advise on, for example, entitlement to benefit[*]Many Debt Management Organisations do not give financial advice and so do not give customers details of all the options open to them with the advantages and disadvantages of each[*]Debt Management Plans have no legal standing[*]If your monthly payment is low and your debts are high them you will most likely be in a plan for the rest of your life[/LIST]
[CENTER][COLOR=#ff8000][SIZE=5]* [SIZE=2]Debt management plans are subject to status. Conditions apply. Repaying the debt over a longer period may increase the total amount to be repaid. Your ability to obtain credit will be affected in the short term and might be affected in the medium term, fees are also payable for some DMP's.[/SIZE][/SIZE][/COLOR][/CENTER]