A debt management plan can help people repay their full debt by simply re-arranging their payments to creditors to last longer than originally agreed.
There are some common misconceptions about debt management plans which many people don’t know until they’ve entered the debt solution.
These are the most common questions we get about the debt management plan solution but if there is something missing people ask us in the debt management forum.
What is A Debt Management Plan?
A plan to repay a debt over a longer period of time, making smaller monthly contributions than originally agreed. People should be able to repay their debt within a reasonable period of time.
Is A Debt Management Plan Free?
Some debt management companies will take a monthly fee for arranging and managing the solution. However there a organisations which will get donations from creditors so don’t charge clients to deal with the debt management plan,
How To Enter A Debt Management Plan?
Once someone has been told by a free and impartial debt advice organisation an IVA
is the best solution an insolvency practitioner is required to manage the IVA
. The insolvency practitioner will be responsible for proposing the IVA to the creditors, collecting payments and dispersing them.
Will A Debt Management Plan Protect Me from Further Action
No. A debt management plan is not a formal arrangement which means it doesn’t stop creditors taking further action because it’s not legally binding.
Will A Debt Management Plan Affect My Job?
No, because it’s not a formal solution and is just an agreed to repay debt it will not affect any form of employment.
Will It Affect My Credit Rating?
No default is added just because someone enters a debt management plan, however missed payments could. Most people who enter a debt management plan will have missed a payment already so generally it doesn’t change too much.
Will My Interest & Charges Get Frozen
It’s not guaranteed because it’s not a formal arrangement so it’s subject to creditors discretion.