Faced with credit and store card statements coming round quicker each month? There may also be a personal loan taken out in more affluent times which also needs reducing. Everything has managed to be juggled for the last few months, but unfortunately last month the car failed its MOT and required expensive repairs. When these payments can’t be met on a regular basis a decision needs to be taken. The first thing is to acknowledge that this can’t easily be managed alone. Ignoring the situation doesn’t solve the problem.
The First Step
There are many debt management companies who are there to help. These companies all offer similar advice, however be sure to check out the level of fees charged by them. One of the first things they will ask is for an income and expenditure form to be filled out to establish how much money will be available to reduce the debt each month after mortgage payments, council tax, utility and normal household bills have been made. Be realistic when working out monthly expenses. Ensure that everything is allocated a reasonable amount. There is nothing to be gained by setting an agreement in place and not being able to manage it.
Who Does This Assist?
For those with unsecured debts totalling about £15,000 or less these debt companies will liaise with creditors and try to arrange a schedule for repayment. This is an informal agreement and a creditor does have the option of refusing the offer of an ongoing reduction of monies owed. However, it is likely that they will accept an offer made from a Debt Management company as they are aware that they hold all the information regarding income and expenditure. Once a Company is in place to deal with directly with creditors then all phone calls and letters will cease, which will certainly ease the worry and stress caused by the situation.
The Benefits
This isn’t a solution which will suit everyone as there must be a regular income in order to service the repayment. This is usually set to be paid just after a monthly salary has been received – those people who are paid weekly can also be accommodated. The great benefit in dealing with a Debt Management Company is that some or all of the interest owing on the debts can usually be frozen and that monthly payments can be reduced accordingly. The full amount of the debt will probably have to be paid but this arrangement means that after say, five years the debt will have been paid in full.
Tags: Card Statements, Creditor, Creditors, Debt Management Companies, Debt Management Company, Household Bills, How Much Money, Income And Expenditure, Monies, Monthly Expenses, Mortgage Payments, Personal Loan, Phone Calls, Reduce Debt, Stress, Unsecured Debts, Worry
