Proven Advice To Freeze Your Interest Rates And Reduce Your Monthly Payments — From The Experts

Kiran Mistry senior partner with WMProserv a firm of Insolvency practitioners and Accountants say’s with the credit crunch biting in deeper than ever people are getting into financial difficulties. Many believe that the only way out of their situation is through formal court proceedings such as an Individual Voluntary Arrangement or even a bankruptcy order. The reality is that there are other choices open to you and “debt management” is one such option. There are many advantages to this method over other debt solutions.

What is “debt management”?

Debt Management Plans are arranged by specialist debt management companies in order to agree reduced repayment terms with your creditors. Debt management companies agree reduced monthly repayments with your creditors on your behalf as well as negotiating with creditors to freeze the interest on your debts.
The idea is that a structured repayment plan is put into place that is both affordable to you on a monthly basis and agreeable to your creditors. You typically have to have at least two creditors and over £1,000 worth of debt to apply.

How can it help me?

There are many advantages to arranging a debt management plan through a debt management company. The first is that it simplifies your monthly commitments and removes the need for you to deal with each individual creditor. The debt management company will arrange for one affordable monthly payment to be made directly to them and they deal with all your various creditors on your behalf by allocating your monthly payment fairly between them. These monthly payments can also be altered quickly as and when your circumstances change.

Another main advantage of debt management is that it avoids the need for court action. Once a plan is in force it may stop the need for creditors to lodge “county court judgements” for unpaid debts and it also means that you do not have to obtain either an Individual Voluntary Arrangement or bankruptcy order through the courts.

What else should I know?

One of the main criticisms levelled at debt management plans is that they can run for long periods meaning it may be some years before you are fully out of debt. The interest payments on such plans can also be quite high meaning that the debts may not be repaid as quickly as through other methods.

Debt management plans are also not legally binding and so it is therefore possible for a creditor to change their mind and back out of an agreement at any time. It is rare that this happens however as most companies realise that professional debt management plans are affordable, realistic and sustainable.

Other disadvantages

When considering approaching a debt management company to discuss a repayment plan, be aware of the fee structure of the companies you are approaching. Many debt management companies charge an administration fee of between 10% and 18% of your monthly repayment although some aim to reclaim these fees from the creditors. There are organisations and charities that offer free debt management facilities so you must carefully research the options available to find the most appropriate scheme for you.

Moe Nawaz a leading business turnaround consultant view on is that, If you are struggling to keep up your repayments on loans or other debts there are many different options available to you. By speaking to a debt management professional or a Insolvency Practitioner it may be possible to agree an affordable monthly repayment plan with your creditors rather than having to suffer through court proceedings to tackle your debt issues.

Kiran Mistry (Insolvency Practitioner)
Moe Nawaz (Turnaround Consultant)
Kiran Mistry and Moe Nawaz have a combined experience of over 30 years in the Insolvency and Turnaround business. They have helped and advised 10,000’s of business owners in the UK.

–
Kiran Mistry (Insolvency Practitioner)
Moe Nawaz (Turnaround Consultant)
Kiran Mistry and Moe Nawaz have a combined experience of over 30 years in the Insolvency and Turnaround business. They have helped and advised 10,000’s of business owners in the UK.