Am I Debt Management Suitable?
There are a number of reasons why, and why not, you may be debt management suitable. The best way to see if your financial circumstances mean that you are suitable for debt management is to seek professional advice about your debt. This should help you to understand an alternate debt solution which you could benefit from as well accessing if you are debt management suitable.
If you are debt management suitable, it make sense that you understand the nature of this debt management solution and how it can help you with your debts and, ultimately, allow you to become debt free. The following offers you the basics of a debt management plan…
A debt management plan is an informal agreement between you and your unsecured creditors. A debt management plan allows you to reorganise how your debts will be repaid to your creditors. It will allow you to make the repayment at a level that you can afford after all essential living costs, such as food, utility bills and mortgage payment, have been accounted for.
A debt management plan is best for those who are struggling to meet even their minimum unsecured debt repayments after other living expenses have been accounted for. Unsecured debts includes debts such as credit cards, personal loans, store cards and overdrafts, all of which can be included in your debt management plan.
Many of our clients find that only making one payment to cover all of their unsecured debt helps with their budget management. No longer should you have to worry about missing payment to your unsecured creditors and they could all be covered with the single payment to your debt management plan. Our plans are tailored to suit your personal circumstances, so if you get paid weekly and would prefer to make payments on a weekly basis we can make this happen.
When deciding whether or not you are debt management suitable, you should be aware of any considerations of a debt management plan. For example, repaying your unsecured debt over a longer period of time means that it will take you longer to be debt free. A debt management company, such as One Advice, will try to get your creditors to freeze additional interest and charges on your unsecured debt but this cannot be guaranteed.
Another consideration to make when deciding if you are debt management suitable is about any possible alternatives. A debt management plan is a suitable debt solution for many people struggling with debt, but not all – so always be aware of your alternatives. For example:
Debt over £10,000? – First see if your circumstances mean that you are suitable for an IVA. An IVA (Individual Voluntary Arrangement) is a legally binding agreement between you and your creditors which allows you to only repay the debt that you can afford. The rest of your unaffordable debt will be written off once you have successfully completed the IVA, typically a 60 month repayment period.
IVA also allows you to avoid bankruptcy and you shouldn’t have to worry about losing you home (although you may have to release some of the equity which will be repaid to creditors).
Resident of Scotland? – IVA is not available to residents of Scotland; your alternative is a Trust Deed. Like an IVA, you only repay the part of your debt which is affordable.
This only gives you the basis as to whether or not you are debt management suitable. The best way to understand about your ideal debt solution is to get professional debt advice.