Debt Management - How Should I Do It?
If you can’t keep up with your debt repayments, then a debt management plan could be the right debt solution for you. Your lenders may agree to accept lower monthly repayments, based on what you can realistically afford. They may also agree to freeze interest and/or waive charges - although they are not obliged to do so. Debt management can be carried out in different ways: on your own, or via a debt management organisation which will organise a debt management plan for you. However, there are a few things you may want to consider before you get in touch with your creditors - or ask a debt management organisation to do it for you:
- If you change the way you repay your debts, you will be defaulting on your original repayment agreement. This will be shown on your credit rating for six years, which could affect the cost and/or availability of credit for that time.
- Creditors are not legally obliged to accept the new repayments terms, or stick to them once they’ve agreed.
- If you agree to repay your debts over a longer period of time, you may increase the overall repayment amount (due to interest).
- Lenders will not agree to lower repayments unless you can’t afford to make the agreed repayments to your debts.
Debt Management - How Could I Do It?
If your debts are getting out of control, then a debt management plan could be the right debt solution for you. If you can’t afford to keep up with repayments to your unsecured debts, your creditors may agree to accept lower monthly payments, freeze interest and/or waive charges - although they’re not obliged to do so. Debt management can be done in different ways: on a debt management plan arranged by a professional debt management organisation, or on your own. There are a few things, however, that you should consider before contacting your creditors, or asking a debt management organisation to do it for you: