Debt Management is one of the most commonly used ways to tackle serious debt problems in the UK, so there are many debt management companies available to offer their services.  However, having such a vast choice can make the job of selecting one that you can depend on quite a difficult task. It is very important to approach more than one company, so that you can compare what they offer you, but this safeguard alone is not enough.
There are many debt companies operating whose proposals to you will be based purely on providing large fees for them, rather than offering you the most appropriate solution for your circumstances. For this reason, you need to be armed with some basic information before you launch out and start asking a debt management company to help you. Your starting point should be to have a good understanding of what you can expect a good UK debt management company to do for you, and an understanding of how to avoid the less reputable companies. You can achieve both of these aims by reading the rest of this article.
A UK debt management company can help you out of debt by providing an informal payment scheme known as a debt management plan. These will only be available to you if you have a substantial amount of debt to more than one creditor and you are struggling to keep up with payments. Also, the type of debt that these plans can deal with is restricted to what are known as unsecured debts. These will include all credit and store cards, personal loans, and normal household bills, but not a mortgage or hire purchase agreement, as these are legally tied to assets, and therefore not unsecured.
When you approach a UK debt management company, they should first of all go through your finances with you, so they can get a good understanding of your situation. If they feel they are able to help you, they will then make a proposal for the best way forward. This will normally involve an advisor dealing with all your creditors for you, and negotiating with them to come to new arrangements for paying back the money you owe. The idea is that they can significantly bring down the total amount you have to pay out each month by getting agreement to change the repayment terms, which will normally mean reducing interest charges and any penalty fees too.
The result of the negotiations will be that you just have one monthly payment to make to the UK debt management company, and your creditors will stop bothering you because they have to deal with the debt advisor instead. The best companies will also help you by providing debt counselling and help with budgeting and money saving advice. This type of plan is a tried and tested way to become debt free within a fixed period. For a debt management plan to work, you will need to have a regular income, which leaves you with enough money to make a monthly payment into the plan.
If you find that your situation is so serious that you do not have enough spare income to manage the payments required on a debt management plan, all is not lost. Many people think that bankruptcy is the only alternative in such circumstances, but there is a much better option called an IVA. An Individual Voluntary Arrangement is something that is only available to UK residents, and unlike debt management plan, it is a formal agreement. One of the advantages of this is that if the creditors for 75% or more of your debt agree to the IVA, then the others are legally bound to it as well. The process involves making fixed monthly payments for a set period, usually up to five years, after which your remaining debts are written off.
Many UK debt management companies will provide IVAs too, so as long as you choose good companies, they will advise you on which option is the most appropriate for your needs. If you wish to look into this further, the most important thing is to limit your discussions to those companies that you know are safe. You should only talk to the most reputable and well established companies, who can demonstrate a good record of having successfully helped many other people to get rid of debt. The safest way to start is to follow recommendations for reputable companies and then apply to two or three of them to compare what you are offered.
There are many debt companies operating whose proposals to you will be based purely on providing large fees for them, rather than offering you the most appropriate solution for your circumstances. For this reason, you need to be armed with some basic information before you launch out and start asking a debt management company to help you. Your starting point should be to have a good understanding of what you can expect a good UK debt management company to do for you, and an understanding of how to avoid the less reputable companies. You can achieve both of these aims by reading the rest of this article.
A UK debt management company can help you out of debt by providing an informal payment scheme known as a debt management plan. These will only be available to you if you have a substantial amount of debt to more than one creditor and you are struggling to keep up with payments. Also, the type of debt that these plans can deal with is restricted to what are known as unsecured debts. These will include all credit and store cards, personal loans, and normal household bills, but not a mortgage or hire purchase agreement, as these are legally tied to assets, and therefore not unsecured.
When you approach a UK debt management company, they should first of all go through your finances with you, so they can get a good understanding of your situation. If they feel they are able to help you, they will then make a proposal for the best way forward. This will normally involve an advisor dealing with all your creditors for you, and negotiating with them to come to new arrangements for paying back the money you owe. The idea is that they can significantly bring down the total amount you have to pay out each month by getting agreement to change the repayment terms, which will normally mean reducing interest charges and any penalty fees too.
The result of the negotiations will be that you just have one monthly payment to make to the UK debt management company, and your creditors will stop bothering you because they have to deal with the debt advisor instead. The best companies will also help you by providing debt counselling and help with budgeting and money saving advice. This type of plan is a tried and tested way to become debt free within a fixed period. For a debt management plan to work, you will need to have a regular income, which leaves you with enough money to make a monthly payment into the plan.
If you find that your situation is so serious that you do not have enough spare income to manage the payments required on a debt management plan, all is not lost. Many people think that bankruptcy is the only alternative in such circumstances, but there is a much better option called an IVA. An Individual Voluntary Arrangement is something that is only available to UK residents, and unlike debt management plan, it is a formal agreement. One of the advantages of this is that if the creditors for 75% or more of your debt agree to the IVA, then the others are legally bound to it as well. The process involves making fixed monthly payments for a set period, usually up to five years, after which your remaining debts are written off.
Many UK debt management companies will provide IVAs too, so as long as you choose good companies, they will advise you on which option is the most appropriate for your needs. If you wish to look into this further, the most important thing is to limit your discussions to those companies that you know are safe. You should only talk to the most reputable and well established companies, who can demonstrate a good record of having successfully helped many other people to get rid of debt. The safest way to start is to follow recommendations for reputable companies and then apply to two or three of them to compare what you are offered.
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