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Debt Management

A Debt Management Plan is a plan, set up by a Debt Manager, such as Debt Out; to assist you in dealing with your debts. This resolution is used by individuals when they are no longer able make payments to all creditors due to financial difficulty.

The aim is to have paid off all unsecured debts by the time your plan ends.

The length of plan varies from 12 months to 5 years dependent on your credit agreements and overall financial circumstances.

Debts will always be cleared as soon as they possibly can.

Can Debt Management help me?

A Debt Management Plan could help you if you are unable to make all of your repayments each month, but are able to make contributions towards clearing the balance.

Debt management involves a non-legal agreement which simply means that:

  • There is no contract putting your property at risk
  • It does not involve expensive lawyers
  • It could allow greater flexibility with monthly payment sums should your circumstances change
  • You are free to stop using your provider in the event that you are not satisfied

How does Debt Management work?

Debt can be a confusing topic. We aim to make debt clear, see below the Debt Management Plan explained in six easy steps.

Your elected debt adviser will help you to complete a common financial statement (an income and expenditure assessment).This gives both you and your agent a complete picture of your financial situation. This information is used to calculate how much you can comfortably afford to pay each month from your disposable income.

The receipt of the initial fee and signed letter of authority gives us the green light. As soon as we have both of these we can then put the wheels-in-motion and progress with your tailor made plan.

Your personal finance manager will approach your creditors to see what immediate improvements can be made e.g. the possibility of freezing interest on the account.

All proposals made must be considered by your creditors as, by not doing so, they are potentially hindering your financial circumstances further.

They are not obliged to accept.

Following the initial fee you make one single payment each month, set-up as a standing order. This is then distributed amongst your creditors in the most beneficial way to you and your current financial circumstance. Our monthly fee, agreed by you, will be included in this payment.

Throughout the duration of your Debt Management Plan you can contact your dedicated personal finance manager if you are experiencing difficulties. If your financial situation changes your personal finance manager will review your situation to ensure the best action is being taken.

Additionally an annual best plan review will be undertaken on your behalf to check that your plan continues to serve the purpose it was set up to serve and remains as the best possible path for you..

The plan will continue until your debts are cleared or until you wish to end the agreement.

Important notes about Debt Management

Taking on a Debt Management Plan could affect your credit rating, the length of time it is affected for may vary from short to long term.

While most creditors are keen to work with you to potentially reduce interest and charges, making repayments over a longer period of time may increase the amount you pay, it may also be the best option for you and save you from getting further into debt.

Changing your repayment agreement may also lead to your creditors issuing a default notice if they haven't already done so.

Debt management cannot be used for secured debt - seen as priority debts, such as mortgages, secured loans, council tax and utility arrears. Not paying these types of debts could severely impact your life, especially in the case of mortgage payments, as your home may be repossed.