subject: Debt Management Relief – How A Legitimate Debt Management Company Can Help You [print this page] Managing debt burden in a professional way is a simple and effective way to pay your non-priority lenders. The expert debt counsellor hired by you calculates the amount you can afford to pay after giving consideration to your priority debts like mortgage, utilities, council tax etc. and other day-to-day living expenses. Any money left is then deposited with the company who is managing the debt burden as a single monthly payment. This amount is distributed to your non-priority lenders on your behalf.
The debt professional negotiates for reduced payments on your behalf with your lenders. In many cases the lenders will also agree to totally freeze or reduce the amount of interest being charged on your accounts because they also want to receive back their investment. As a result of this negotiation, you will make payments that you can afford and reduce your debt burden.
Debt management plans Have regular reviews of your circumstances and your monthly deposit amount changing to reflect your situation. These plans can be paid or free of cost. Keeping the growing debt situation in the US in mine, some charitable organisations have come up with free debt management plans. Every penny you send to the company goes to paying off your debts. Once the company receives your monthly deposit, you have peace of mind in knowing that all of your creditors on the DMP will be paid on regular basis. This plan may not be the most appropriate solution to your particular circumstances. That's why the concerned company arranges an appointment with a debt counsellor to discuss your individual circumstances and options.
The tenure ofdebt management plans varies from person to to person. This depends on the amount of debt and level of repayment agreed with the debt counsellor. As a rough guide, if you divide your total debt by your monthly repayable amount, this gives you the total number of months it is expected to last at a stretch. With these plans, your income and expenditure will be reviewed periodically with a support debt counsellor. If your financial circumstances improve, there may be an opportunity to increase your monthly outgoing and this will shorten the life span of your DMP. Conversely, if your situation deteriorates with the passage of time, it may be possible to temporarily reduce your payments until they are stabilised.
The debt management company sends you a statement each month showing how the monthly payment has been shared among your lenders, so you'll always be aware of how much each has been paid. The effect of debt management on the credit rating of the applicant also varies. If the applicant is not making your contractual monthly payments to his creditors it is likely that his credit rating has already been affected. When he is making reduced payments through a Debt Management Plan many creditors will record this as a positive note on his credit file. Some lenders may continue to charge interest even if the management plan is in operation. However, these companies have excellent cooperation from many creditors and this can have a significant impact on your ability to clear your debts. However, you should be aware that the debt management plans are not legally binding and can be terminated at any point of time.
Debt Management Relief How A Legitimate Debt Management Company Can Help You
