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What is Debt Management?

What is Debt Management?

Struggling to mange your debts...

Debt management is what it says it is. Help with managing your debt. Life can take a downward spiral if you’re struggling to meet monthly payments on your debts and it can sometimes be hard to see the woods for the trees.

Debt management companies can help you get back on your feet. They will assess your situation and discuss a range of strategies. They negotiate directly with your creditors – be they store cards, credit cards or loans - to agree lower monthly repayments that you can afford and in some cases are able to have a portion of your debt written off.

Working closely with you, a debt management advisor will look at your levels of debt, who they’re with and your monthly income. From this they can ascertain what you could afford to repay each month and can advise which route of debt management would best suit your situation. There are various options available depending on degree of your debt and your ability to repay. The simplest is a debt management plan, the most extreme, bankruptcy. Other options include a legally binding IVA or for those on very low incomes or with very few or no assets, a debt relief order.

An important benefit of using a debt management company is that they help you draw-up the necessary agreements and legal documents and buffer you from further contact with persistent creditors. In some instances you pay them instead of your creditors, making your monthly finances easier to manage.

There are advantages and disadvantages to any debt management solutions so it’s important you consider these before deciding on a course of action. Usually the biggest advantage is the peace of mind having a financial strategy in place brings, but all kinds of debt management plans will affect your credit rating, at least in the short term. Further details of the various debt management options are outlined on our pages in this section. You’ll be able to weigh up the pros and cons and think about which solution may work best for you.

If you’re at the point of no longer being able to manage your finances and it’s affecting the rest of your life, speaking with a debt management advisor could be a good starting point.