About... Debt Management

In some instances, following a self help strategy takes you part of the way to improving your finances but is ultimately unsuccessful in freeing up enough income to meet creditor demands. In these instances debt management may help.

When you would prefer not to negotiate directly with your creditors a debt management specialist can do so you your behalf. They have the experience to deal with your creditors and do have the capacity to improve your cash flow.

Debt management can be considered for cases where you have no judgments or the total debts you have are greater than £5,000. In entering into a debt management arrangement there are however a few key drawbacks:-

The debt management plan continues until all debts are paid in full. Unless individual creditors specifically agree, there is no debt write off after a period of time.

Interest may continue to be added to your outstanding debts unless your creditors agree otherwise. If this occurs and your payments to the debt management plan are less than the interest payments you may never be free of your debt.

There are two types of organisation that can help you set up a debt management programme.

1. Use an agency that can provide free advice to people who have debt problems, and who may be able to provide practical assistance when it comes to negotiating arrangements with creditors. These include:

• Consumer Credit Counselling Service  This is a registered charity providing free practical help and guidance to the public in the UK ranging from budgeting to debt management plans.
• National Debtline  A free source of help for people in debt in the UK.
•Money Advice Scotland This is an umbrella organisation providing details of free advice centres in Scotland.
• Payplan is a charitable debt management company. It is supported by donations from the credit industry and does not charge debtors using its services.

By selecting any of the external links (in blue) above, you will be leaving the regulatory site of About Mortgages Ltd. Neither About Mortgages Ltd nor Sesame Ltd is responsible for the accuracy of the information contained within these linked sites.

2.  Use a private debt management company - they will do the work for you, but at a cost, and (despite the claims such firms tend to make) will still leave a bad credit history on your record. This is not a course of action we'd recommend. Debt management companies invariably take their fee from part of the money which you pay towards your creditors. Ultimately this means your debts take longer to pay off than if you made the arrangement yourself.

Help get in control of your finances and see the information lenders see Click here for a free 30-day trial and a free copy of your credit report