How Does a Debt Management Plan Work?

Posted by Debt Support Service on February 17th, 2020

Dealing with money issues and getting your finances back in shape can sometimes be unpleasant. Individuals who believe managing debt management programs themselves is labour, could work with a debt management company.

A Debt Management Plan is a strategic effort to help you get back control over your finances while reducing your unsecured debts that are not backed by collateral. A debt management plan is usually arranged on your behalf by a provider, for instance a debt charity or Debt Management Company. This usually means you will make a monthly payment to the Debt Management Services provider and they will contact all your creditors and send every one of them a share of your payment each month. In case you are finding it hard to keep up with payments to your debts, then they may review your finances and help you work out a spending budget to see if a debt management plan is the right solution for you.

When it is suited to your situation, they may set up a free debt management plan for you with no fees. You would then pay them a reasonable monthly amount that they share out fairly among your creditors. You can keep up to date with your on-line and we they send you a monthly invoice detailing how much you have paid to each of your creditors.

Advantages of a free Debt Management Plan

Should you begin a Debt Management Plan with a fee charging company, it usually means you will be paying charges to the Debt Management Services provider as well as make payments on your debts. This means it is likely to take more time to pay off your debts because some of the money you might be paying to your creditors is going to the Debt Management Plan fees. Moreover, a fee charging provider won't give you any guarantees your lenders will agree to the plan or stop interest and fees.

The advantage of owning a fee free Debt Management Plan is that there are no monthly fees, so all the money you pay goes towards paying back your debts. Furthermore, each money paid to your Debt Management Services provider will go to your creditors, which makes it faster for you to pay off your debts.

After having read through, do you think a Debt Management Plan is right for you? If so, we’ll help you set up and manage it with absolutely no expense to you.

In case you choose to start a Debt Management Plan with a fee charging provider, the charges you pay will cover the expenses of them setting up your plan, dealing with your monthly installments, providing you with statements and reviewing your plan on a regular basis to ensure its still working for you. Remember a provider may do all this at no cost. The prices charged by commercial Debt Management Services provider will vary between companies.