Debt management can ease the burden
Coping with unmanageable debt isn`t `just` bad for your bank balance and your credit rating. Struggling to keep up with unsecured debts that you can`t realistically afford is quite simply stressful.
All too often, you find you`re forced to spend time calling your creditors and `juggling` your debts - talking to your bank about extending your overdraft, for example, or hunting around for another credit card with an interest-free introductory period (and paying the transfer fee, of course).
How debt management can help
This is where debt management can ease the burden. Making lower monthly payments is just one of the advantages - to many people, the thought of letting debt management professionals carry out the negotiations and handle the correspondence from your creditors is equally interesting.
The first time you talk to a debt expert about debt management, they`ll run through your finances with you, so they have a clear picture of what you owe, what you earn and what you need to live on. Once they know this, they`ll be able to calculate how much you can realistically afford to pay towards your debts every month, and whether your unsecured creditors are likely to accept this.
If you decide to go ahead and enter a debt management plan, they`ll call your creditors on your behalf. They`ll go through your finances with them, explain where you stand and propose a new repayment schedule that reflects what you can really afford to pay every month.
If they believe it`s the best way for you to repay your debts, your creditors may well accept this, even though it means accepting lower payments than you originally agreed to make. They may also agree to freeze / reduce interest, which means your debt won`t be growing as you pay it off (or at least it won`t be growing as quickly).
Once your debt management plan has started, you can then get on with clearing your debts at a rate you can afford - and leave the negotiations and paperwork to debt professionals.
A note about debt management
If debt management sounds like a good way of clearing your debts, you can call one of our debt advisers on 0800 161 3516 or click here to request a free call-back. They`ll be able to tell you whether debt management could be right for you, or if you might be better off considering an alternative debt solution.
Like any debt solution, though, debt management does come with its `cons` as well as its `pros`.
First of all, your creditors won`t accept lower payments unless you can`t keep up your payments as they stand today. If you can, they will expect you to.
Second, repaying any debt in smaller instalments will mean you`re in debt for longer and it can end up costing you more, as you`d be paying interest for longer (unless, of course, your creditors agree to freeze interest).
Third, your creditors aren`t obliged to accept any changes to the way you`re repaying your debts. As mentioned above, however, they may well do so if they can see this is the best way of helping you repay what you owe.
Finally, failing to keep up with your original repayment agreements will show up on your credit rating - whether or not you join a debt management plan - and this can make it harder and/or more expensive to access further credit for the six years it stays there.
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