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10 Quick Debt Management Facts

Debt management at a glance


If you want to discover more about debt management as a debt solution and are short on time, we’ve compiled the following 10 quick facts to give you a brief overview of what’s involved.
  1. Reduced monthly payment - Debt management involves negotiating a reduced monthly payment to your creditors. Your debt management company will collect one monthly payment from you and distribute it to your creditors on your behalf.
  2. Disposable income - You will be expected to provide a detailed breakdown of your income and expenditure to your debt management company so they can calculate the monthly amount you should pay.
  3. The law - A debt management plan is not legally binding on you or your creditors, unlike other debts solutions such as an IVA.
  4. Creditor phone calls - A debt management plan provides relief from creditor hassle.
  5. Your credit file - Your credit rating will show that you are making reduced payments to your existing creditors. This will make it more difficult for you to get credit in the future.
  6. Interest & charges - Your creditors are not obliged to accept your request to reduce your payments and if they do, they can still add penalty charges and interest to the amount you owe them.
  7. Types of debt - Only unsecured debts such as personal loans, credit cards and overdrafts can be included in your debt management plan but there are exceptions such as council tax arrears and utility debts.
  8. Further action - Your creditors can still pursue you for full payment of your debt even if you’ve entered into a debt management plan.
  9. Eligibility - You should owe more than £1500 to two or more creditors and have a regular income to be eligible for debt management.
  10. Overview - Debt management is intended to be a short to medium term measure to give you relief from unmanageable repayments and gives you the chance to get your finances back on track. It doesn’t result in any of your debt being written off as happens with an IVA or bankruptcy.
If you’ve got any questions or queries regarding the points mentioned above and are unsure whether a debt management plan is right for you, then it’s important you talk to a professional debt adviser.

To find out more about any of our debt services, call us free today on 0800 043 4747 or find out how you can benefit from a debt management plan.