When it comes to dealing with your debt there are a number of options available. One such solution is to arrange a Debt Management Plan; this is an informal agreement between you and your creditors that concerns paying back your debts. They are designed to allow those struggling to pay their monthly debt repayments to make a more affordable, single payment towards their debt, which is divided between your creditors. Debt Management Plans deal with non priority debts, such as your credit, bank loans or even students loans.
How do they work?
Debt Management Plans are typically managed by your provider, meaning you don’t have to deal with your creditors directly. These plans are also not legally binding, meaning that you may cancel them at any time and you are not tied in for a certain period of time.
Could a Debt Management Plan be right for you?
When it comes to deciding if a Debt Management Plan could be right for you there are a number of important factors to consider. For example a Debt Management Plan could be appropriate if you think that a single set monthly payment could benefit you and help you to budget and manage your finances better. Or if you are able to manage your living costs and priority debts such as your mortgage payments or council tax, but are having difficulty keeping up with your loan or credit card payments. These kinds of plans can also be a fitting option if you find yourself in a situation where you have a temporary financial problem or are unwilling or unable to remortgage your home.
However it’s worth bearing in mind that because you are only making a single monthly payment, and this will likely be less than what you were previously paying, it may take you a longer amount of time overall to pay off your debts. Furthermore your credit rating may also be affected.
Here at Scottish Debt Help we are able to offer a range of debt solutions in Scotland including Debt Management Plans to help get you and your finances back on track. For more information about our range of services please do not hesitate to contact us and a member of our friendly team will be happy to help you with your enquiries.