What is a Debt Management Plan?

A debt management plan is an option that may help you to avoid bankruptcy. A debt management company will work out your disposable income and contact your creditors to negotiate a new affordable monthly repayment plan.

If the plan is accepted by your creditors you will make one monthly repayment to the debt management company. The debt management company will then pay your creditors.

You should be aware that you may be encouraged by some organisatios to opt for a debt management plan when in fact it may not be your best option. If you would like to review your options then contact us

What is the purpose of a debt management plan?

The overriding purpose of a debt management plan is to allow you to repay your debt. It is also sometimes used:

• To demonstrate your suitability for an IVA.
• To persuade your creditors not to take legal action whilst you take steps to improve your financial position.

Debt management plan advantages

• Repay your creditors with an affordable repayment
• Interest and charges may be frozen
• Avoid bankruptcy
• A debt management company will make the payments

Debt management plan disadvantages

• The is no debt forgiveness, you will have to repay all of your debt
• No legal obligation to freeze interest and charges
• It will take longer to repay the debt as you will be paying less each month
• Default notices will be recorded on your credit report as you will be defaulting on your original agreement
• Crown debts such as tax cannot be included

Debt management plan considerations

You should give serious consideration to the length of the debt management plan. If it will take you longer than 5 years then you should also consider an IVA or bankruptcy. You do not want to be in debt for the rest of your life.

How can I get a debt management plan?

Due to the recent economic problems there are now hundreds of organisations offering debt management plans, mainly for their own pockets!

If you are considering a debt management plan the first consideration you should have is where to go for advice. Many companies out there persuade you to use the debt management plan as a debt solution purely for the benefit of their profit.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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Mortgage Xperts is a trading name of Echelon Mortgages Limited.

Echelon Mortgages Limited is authorised and regulated by the Financial Services Authority in England and
entered on the FSA Register under reference number 461478.

The guidance and/or advice contained within this website is subject to the UK regulatory regime and is
therefore primarily targeted at consumers based in the UK.

Address: Mortgage Xperts
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Liverpool
L9 8BU

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