Debt management plans can help you to bring your financial problems under control and help you avoid bankruptcy, or having to borrow even more money in order to pay the debt that you already have. Of course debt management plans may not be the right choice for everyone; your own individual circumstances will determine if this is the best route for you to eliminate your debt.
How to Understand and Compare Debt Management Plans
There are two types of debt management plans, one is created by the court system and the other is put together by a debt advice agency such as the Citizen’s Advice Bureau. Debt management plans done by the court will take into account the amount of money you owe and what your payments should be based on your ability to pay. With a debt advice agency you will not have to deal with your creditors directly, but it will end up costing you more due to the fee they charge for their services, which is usually about 15 percent of your payment. Another option is to create your own debt management plans, and pay your payments yourself, though for this to work you do have to be sure to make your payments on time. When you compare debt management plans, you must decide which is the best option for you and your circumstances.
Free Debt Management Plans
For those who cannot afford the fees that accompany debt management plans, there are some situations where you may be able to find free debt management plans. If you want to get out of debt but don’t want to deal with a consolidation loan or an IVA, this may be your best alternative. When you choose one of the free debt management plans, all of your monthly payment will go toward paying debt, plus there are no fees, deposits, or setup fees. If you are already having problems paying off your debt, it doesn’t make a lot of sense to pay even more money for a debt management plan when you can find free debt management plans.
The agencies that offer free debt management plans will setup a payment plan that will be affordable and allow you to finally get out of debt. The agency will also negotiate with your creditors so that you do not have to; creditors tend to be far more cooperative with a debt management agency than with the debtors.
To avoid having to deal with IVA or bankruptcy you might want to compare debt management plans to find the best option for your situation. Getting out of debt does require some effort, and most often debt management plans provide the easiest and fastest way to eliminate debt.