Debt Management information - please view the topics below

> What is Debt Management?

Debt Management is an informal agreement between you and your creditors. You demonstrate to them how much you can afford to pay, and they may agree to reduce their monthly payments to a level you can manage. They may also freeze the interest for a while. This means that you are paying the debt back at a slower but more affordable rate.

> Who should use Debt Management?

If you have major debt problems, Debt Management is generally not seen as a long-term solution. Some of your creditors may agree to freeze the interest, and they might stop hassling you for a while. But others may not. What's more, all creditors will review your account regularly and at some point will start adding interest and charges again, and resume hassling you. So Debt Management is no solution for large debts. Having said that, for some people 12-24 months of reduced monthly payments and diminished interest will be all that's needed to solve their problems. If their total debt was not huge in the first place, after 12-24 months it will have gone down enough to allow them to afford the minimum payments again, and clear the debt as usual. So although Debt Management can be an effective way forward, for people with larger debts a solution is needed that will write off debt, like bankruptcy or the IVA. Explore the information below to see if a Debt Management Plan might be for you.

> One single monthly payment

First we will work out how much you are able to pay each month, based on your household income and budget. There is a greater degree of flexibility here than with an IVA or bankruptcy; because Debt Management is not legally binding, you are able to include any expenses you like. Be aware, however, that a luxurious expenses summary will not produce good results with the creditors, who may refuse to freeze interest and charges. Either way, you make the payment to us each month, and we divide it between your creditors.

> Creditors generally start contacting us, not you

As your Debt Management Plan becomes established, your creditors will settle down and get used to contacting us on your behalf. This will mean that you will have less hassle from them. However, there is no way to guarantee this will happen, and they are still legally allowed to contact you whenever they like. For legal protection from all creditor action, consider the IVA or bankruptcy.

> Usually you have much of your interest and charges frozen

Although it is impossible to guarantee that all your interest and charges will be frozen, in the great majority of cases we are able to have success with most creditors. Having interest and charges frozen is a great advantage as it means that more of your money is going towards clearing the debt, not paying the creditors for the privilege.

> We will continue to negotiate for you

Creditors tend to review Debt Management cases every few months, and we will continue to negotiate on your behalf to ensure that any changes that they propose will be met with resistance. For example, if they wish to resume interest charges, we will fight your corner and attempt to get this stopped.

> Makes things easier in the short term and can be a long-term solution for smaller debts

In the short term, a Debt Management Plan makes your life less stressful and your bills more affordable. For those with bigger debts and smaller monthly contributions, Debt Management is usually no more than a method to 'tread water' while you get your finances in order. For people with smaller debts and larger contributions, however, it can be a realistic solution for dealing with debt.

> Take the first step

Ready to apply? Contact us.