Is a Debt Management Plan Right For Me?
When you are struggling with debts, it’s often difficult to know what to do, what solutions are available and who to turn to for help. Making the decision to seek help is often the most difficult but also the most important step in taking back control of your finances.
If you are struggling with unsecured debts (loans, credit cards, store cards, overdrafts & catalogue debts) of up to £10,000, finding it more and more difficult to keep up with the monthly payments then a Debt Management Plan may be right for you.
One of the key benefits of a Debt Management Plan is having all monthly payments consolidated into one single monthly repayment. It may also be possible to freeze interest and any other additional charges in some cases.
However, when considering a Debt Management Plan you need to take the time to understand the disadvantages as well as the advantages.
Advantages and Disadvantages of a Debt Management Plan
There are a number of benefits in using a Debt Management Plan if you are struggling with mounting debts. However, it is important to remember that there are some drawbacks aswell.
Some of the advantages include:
- You’ll only pay what you can afford each month
- In some cases interest will be frozen
- You won’t have to deal with creditors, we do that for you
- We can support you should creditors contact you
- You needn’t tell your friends and family if you don’t want to
Some of the drawbacks include:
- It ‘s not a legally binding agreement
- We cannot stop creditors contacting you
- Your debt can still get worse if not managed properly
- It can take a long time to complete a debt management plan
- It will affect your credit rating
- If interest isn’t frozen, it can continue to build up