Setting up a Debt Management Plan is one of the most effective ways of getting your finances in order. It is often used when an individual doesn’t have free cash to manage monthly repayments, yet is gaining a regular income through employment.
In its simplest sense, such a plan is an agreement between you and your creditors to pay all of your debts, with regular payments to a licensed debt management company, such as Simple Financial Solutions. By employing our services you will not have to worry about keeping on top of multiple payments on different days of the month – you simply pay us and we sort out the rest for you.
Our helpful and friendly staff will provide you with all you need to know and keep you updated as to your plan’s progress. To be eligible, a Debt Management Plan can only be used to pay ‘unsecured’ debts – i.e. debts that haven’t been guaranteed against your property.
Who is a Debt Management Plan best suited to?
A Debt Management Plan could be for you if:
- You are struggling to pay off credit cards, loans or store cards
- You need someone to help sort out your payments and deal with your creditors on your behalf
- You would prefer to pay one affordable amount to all your creditors each month
- You have debts of £5,000 or more
- You have at least two or more outstanding debts
- You have £100 or more available income per month, after payment of normal household bills
The benefits of a Debt Management Plan
Taking out a Debt Management Plan with Simple Financial Solutions carries many benefits as, in return for one affordable payment per month, we will:
- Work with your creditors on your behalf, ensuring that interest payments are frozen and you don’t spiral deeper and deeper into debt
- Aim to reduce the amount of calls and letters from creditors
- Assist you in the preparation of a Debt Management Plan that clearly illustrates to your creditors that, based on your household and personal spending, you are paying back what you can realistically afford
- Request that all outstanding debt is written off at the end of the plan
- Organise and make the regular payments to your creditors fairly, as per what is agreed in the plan
What risks are involved?
Navigating your way out of debt is notoriously difficult, so it is imperative that you are aware of any associated risks. One downside of the Debt Management Plan is that your creditors do not have to agree to the plan. They are under no obligation to stop interest and charges or write off your debt at the end.
If you cannot keep up with payments your plan may be cancelled or you could incur additional charges. Furthermore, you may end up paying more and for a longer period in the long-run and if your accounts are defaulted this will have a negative effect on your credit rating.
So what now?
In order to be able to figure out whether a Debt Management Plan will work for you, our team of specialists at Simple Financial Solutions will be able to discuss your situation with you and advise on what the best approach may be.
If you’d like to find out more about a Debt Management Plan or other debt solutions, call us now on 0800 043 2027 for an initial discussion.