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What is a Debt Management Plan?

The debt management plan is designed for individuals or families who have a number of separate debts and are struggling to keep up with repayments. Debt management provides a realistic and helpful alternative to the balancing act of repaying numerous debts over a protracted period of time. By taking advantage of the free debt advice those who are under the burden of considerable debt can have peace of mind and assistance in repaying money owed and negotiating with creditors to create a way forward acceptable to both parties.

The debt management plan works by consolidating all of the debtor’s monthly payments into a single affordable and realistic monthly repayment. Debt management takes into account the circumstances of the debtor and determines a realistic monthly payment amount. The calculation take into account the necessary monthly outgoings of the debtor including mortgage payments, rent, food and utilities and creates a repayment amount from the disposable income that remains. This means that the debtor’s earnings are protected for monthly essentials and only the remaining funds will be used to repay creditors. Moreover, as the debtor’s financial position changes for better or worse, the monthly payments can be adjusted.

The debt management service mediates between creditors and debtors in order to reach an agreement concerning the repayment of debts. Once agreement has been reached the debtor will pay a single monthly repayment to the debt management service which will then be forwarded onto the creditors. Moreover, after the agreement interest is usually charged at a reduced rate or even frozen altogether. Also, after the agreement is in place creditors cannot pressurise debtors into selling property or assets or encourage further borrowing in order to pay off their debts.

The free debt advice that is provided can help debtors to avoid their current situation in the future but also help them to manage the current situation in the best possible way. Such debt help can be invaluable in managing debts and maintaining a positive attitude while paying off debts and finishing the process of becoming debt free. Combined the assistance of a debt management plan, debt help can provide a final solution to debt problems and ensure that the situation is not recurring.

By taking control of debts, debtors can be sure to halt the spiralling process of numerous debts with numerous interest payments and numerous charges. By consolidating all debts under a single debt management plan debtors can ensure that monthly repayments are realistic and affordable without having to compromise the necessities in life. By keep up with the plan as laid out by debt management debtors can be sure to become debt free and the end of the period without having to put life on hold in the meantime. With additional debt management advice debtors can become debt free in the shortest possible period of time with the minimum amount of hardship and with peace of mind that the debt will not increase with additional interest or charges.

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