Oliver Grove, London (your-story) December 14, 2011 – Debt management plans are a practical way to solve debt problems in the United Kingdom, depending on the person’s situation. A person using a debt management plan ( http://www.creditwhiz.co.uk/debt-management-UK-advice.htm ) has a greater likelihood of improving their financial life, but the plans are not helpful in every situation.
An individual needs to consider their particular situation and ask themselves the correct questions before they make a decision. The following seven important questions will help people to decide whether they should take advantage of debt management plans or choose another option.
How do debt management plans help people?
Debt management plans are designed to help people who cannot afford to pay back their creditors. The plans help someone to organize their finances and pay off all outstanding debts. A credit counsellor communicates with creditors to lower repayment amounts so that people can afford to make monthly payments and get out of debt. People only need to make a single monthly payment to the debt management company.
What role does the debt management organisation play?
The debt management organisation uses the client’s monthly payment to pay off the money owed to creditors. This includes the money owed to credit card companies. In most cases, a debt counsellor is able to convince lenders to lower interest rates and finance charges. They may even be able to lower the actual loan amount because lenders are often willing to work with a third party in order to receive money owed to them. There is no way of knowing whether a debt counsellor will be successful in their negotiations.
How much do clients have to pay each month?
The monthly payment plan is determined by the debtor’s financial situation. The debt counsellor and the creditors work together to come up with a suitable amount. The final amount will be a figure that the client can reasonably afford to pay each month.
How long does the plan last?
The duration of monthly payments is based on two different factors, the debt amount and monthly payment amount. People who pay more each month will get out of debt faster than those who make small monthly payments. It takes the average person 2-5 years to get out of debt.
Does the DMP affect a person’s credit rating?
A person’s credit rating does not change when they first join the DMP. Once people make consistent monthly payments, their credit rating will improve.
Can people keep their house?
Yes, people can keep their house if they wish or they can choose to offer it the DMP. Homeowners can make the decision that best suits their needs.
Are people simply better off filing for bankruptcy?
People can make the decision to file for bankruptcy if they choose to do so. The downside to bankruptcy is that it negatively affects a person’s credit rating for up to 10 years. A DMP does not have the same negative impact on a person’s credit rating. Before signing up for DMP people should contact a debt management organisation.
About the Credit Whiz website
The Credit Whiz website also has a very useful FAQs (frequently asked questions) section which is divided into different sections according to the financial solution type. This means that whatever your situation you can see the relevant questions and answers very easily.
On the Credit Whiz website you can also have a live chat with a professional advisor which gives you the freedom to chat online and get a feel for what type of advice you can get from Credit Whiz. Alternatively there is a simple online contact form which can be used and an advisor will then contact you in the daytime or evening, as you require.
The FREEPHONE number for Credit Whiz ( http://www.creditwhiz.co.uk/ ) is 0800 321 789, where you can contact a professional advisor from Monday to Friday 8:00 AM until 9:00 PM.
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