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How and where to find a good debt management plan

The following is a guest post.

More and more people in the UK are taking out a debt management plan. Contrary to popular belief, this is not necessarily a sign of an impending crisis, but an entirely sensible approach to reducing debt. After all, re-organising your finances as part of a debt management plan means that you are serious about meeting your obligations and interested in a solution that will benefit both sides – you and your creditors. With the increased demand in these services, debt management companies have accordingly proliferated across the UK. But how to find a debt management plan that suits your particular needs?

The first step towards a workable debt management plan should always consist in drafting one yourself. After all, debt management, in its most basic premise, simply means looking for practical ways of improving your financial situation and discovering possibilities to save costs, reduce your outgoings and increase your incomings. Finding new sources of income may prove difficult, even though, for example as a freelancer, you may sometimes be able to shed badly paying jobs in favour of more profitable ones. Slashing costs, however, is almost always possible: Do you really need a car to get to work or isn’t public transport or the bike feasible as well? Are there some magazine subscriptions you can cancel? Couldn’t you do some home cooking rather than eating out two to three times a week? There are usually plenty of similar alternatives available.

After you’ve established your personal debt management plan, take some time to browse the web for suggestions. Over the past few years, a wealth of information has become freely available online. Not all of it is equally commendable, but there are plenty of sources offering you insight on a variety of topics directly or indirectly related to establishing a debt management plan. In general, we strongly recommend you stay up to date on financial topics and watch current developments relating to debt in the UK at least from time to time – in some cases; this may prevent you from missing out on a great chance to drive down your debt.

Generally speaking, however, a debt management plan is best set up especially for you by a professional company. The main reason is that for a debt management plan to truly be effective, it will have to tackle the relationship with your creditors and involve debt consolidation. If, for example, you are struggling to meet your monthly obligations, a debt management plan can consolidate your different loans into a single new one, usually with a notably lower monthly rate. You will also no longer need to waste your time with talking to your creditors or their representatives any more, as this will be handled by the debt management company.

Obviously, everything in this scenario hinges on the quality of the debt management company involved. With literally thousands to choose from, the process of arriving at a satisfying decision may seem prohibitively hard. And yet, in the UK, there is a fairly easy way of telling a good debt management company from a potentially risky one: Those who are members of DEMSA have pledged to uphold ethical standards in the business and are safe choices for anyone looking for a professional debt management plan. These companies will provide you with a monthly statement showing you who has been paid; distribute money on a pro-rata basis between your creditors, ensuring that each creditor is being paid fairly. And there’ll be a personal account manager providing one to one contact and ongoing support.

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3 comments to How and where to find a good debt management plan

  • Rain

    tarting a debt management plan means that you are making a new promise to repay your debts in full.When your debt management plan is being set up, your creditors will sometimes agree to freeze any interest charges. However, they don’t have to agree to this. And they don’t have to agree to your plan at all. If they don’t, they can also continue to contact you, ask for payment – or even take you to court if they choose.
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