How will a debt management plan help me?
A Debt Management Plan will help you manage all of your current debt by working out a monthly payment plan designed specifically to fit with your financial means.
By consolidating your payments into one, affordable monthly payment, you can relieve yourself of the pressures of having to pay back multiple debts at once. Generally, though not always, your creditors will freeze the interest and penalties on your debts so that your reducing your monthly payment doesn’t have significant adverse effects in the long run on the amount you need to pay back.
With a Debt Management Plan, you can take control of all of your current debt without needing to take out any more credit, as you would with, say, a debt consolidation loan
Applying for debt management
Applying for a Debt Management Plan is easy via Money Expert. Simply fill in the form and our trusted business partner will start by offering debt management advice based on your situation.
From there they can set up a Debt Management Program for you, involving one simple monthly payment, tailored to fit with your disposable income. Our advice requires no obligation from you, and could set you up to start taking control of your finances within minutes.
Debt Management - Reduce Your Monthly Payments
- Clear your debts without the need for a loan
- Have one affordable monthly payment
- Reduce demands from your creditors
- Get debt free without having to declare insolvency
- Flexible payment plans
- Avoid selling off your assets
The Debt Management Process
1Fill in your details for no obligation debt advice introductionHere at Money Expert we're committed to helping people escape the control that debt can have over their lives through our trusted business partners. First and foremost, head on over to our Debt Management application page and fill in the short form.
2Receive debt management plan built around your individual needsThe idea of a Debt Management Plan is that the monthly payment figure settled on should be one which fits perfectly within your means; so that you pay off as much as you can afford each month and not more. In order to reach this figure, our debt management business partner will conduct a financial review with you by going over your income and expenditure and working out how much you can afford to pay. From this, a monthly figure is agreed upon between us and you.
3Simplify your debts into one smaller monthly paymentHaving conducted a financial review, and tailored a Debt Management Plan to your means, you can begin to pay off your debts. Each month, you pay the agreed amount which is then distributed among your creditors. As this monthly rate could be lower than what you are currently paying, you may be in debt for longer and may end up paying back more due to interest. However, a Debt Management Plan remains a fairly popular solution to the problem of multiple debts if you want to avoid declaring bankruptcy or taking out any further loans.
4Debt management plan feesIf after initial discussion with our trusted business partner you feel a debt management plan would be the best route for you, Immediate Financial, our trusted business partner will set things up. On their standard debt management plan there are no set up fees. All you pay is a maximum fixed monthly payment of £38.50 or 50% of your disposable income whichever is lower.
5What debt management fees coverYour monthly management fee payable to our trusted business partner Immediate Financial pays for the day to day running of your plan, provision of a dedicated Client Liaison Officer, dealing with queries for you or your creditors, dealing with post you receive, distribution of your payment to your debts and carrying out periodic reviews.
The Benefits of a Debt Management planThe main benefit of a Debt Management Plan is that it allows you to pay off all of your current debt much more easily and while still managing to maintain a normal standard of living. Generally, the length of time that you are in debt will increase, but the impact the debt has on your daily life will be reduced significantly. As mentioned above, another significant benefit of a Debt Management Plan is that it is one of the few debt solutions which does not require you to take out any more credit of any kind. While taking out another loan can be helpful, as with a Debt Consolidation Loan, many see a Debt Management Plan as a more prudent option, and would rather escape debt altogether than take out one loan to pay off others. While a Debt Management Plan and its conditions are not legally binding upon your creditors, they will still generally stop any interest or penalty charges while you are repaying your debt. This means that extending the amount of time you spend paying back what you owe should not put you at much (if at all) of a disadvantage in terms of the amount you actually pay back.
Disadvantages of a debt management plan casesCustomers join a debt management plan when they can no longer afford their contractual monthly payments to their creditors. Many people who come to us will already have missed payments and adversely affected their credit file. When Immediate Financial renegotiate payments to a level you can afford it is likely that you will have defaults placed against you which will affect your credit file for six years making it harder to obtain credit even when your debts are cleared. When a creditor does not receive the contractual payment they may put interest and charges on your debt. In the majority of cases we will negotiate with creditors to freeze any charges. However this cannot be guaranteed and in some cases creditors will continue adding to the debt. Immediate Financial will always endeavor to stop this when it occurs. By paying reduced payments to your creditors it will take you longer to repay your debt. We will always strive to give you a clear estimate of the likely timescale of your plan.
Is Debt Management Right For Me?If you are looking to pay off multiple debts without drastically changing your lifestyle and would rather not take out an extra loan to do so, then applying for a Debt Management Plan cold be right move for you. In order to qualify for a Debt Management Plan, you must satisfy the following criteria:
- You must be indebted to at least two creditors
- This debt must be to the value of at least £2,500
- You must have a disposable income of at least £80
- Your disposable income must be lower than your contractual payment
Frequently Asked Questions
You should still be able to apply for a Debt Management Plan if you have a bad credit rating, so long as you still have the appropriate level of income. Your Debt Management Plan will however most likely show up in your credit history for a minimum period of six years and be seen as a negative point by any potential future creditors, making it more difficult for you to get a loan or credit card in the future.
A Debt Management Plan is not legally binding, and so your creditors are not required by law to freeze your interest or any penalties you may incur. However, because of Immediate Financial reputation and experience, they are more often than not able to negotiate to have interest rates frozen.
There is no set limit to the number of debts a Debt Management Plan can cover, but the details of each case are worked out on a case by case basis. Therefore, if your income is vastly disproportionate to the amount you owe, you may have trouble getting a plan agreed upon.
Debt is a problem that most of us will find ourselves facing at least once in our lives.
But don’t worry, with our comprehensive section of guides on debt solutions, you’ll be able to find all of the information you need to get debt free right away.