Debt Management Plan Explained

What is a Debt Management Plan?

A debt management plan is an informal agreement between you and the people you owe money to.  It’s not a legally binding agreement. However, a debt management plan usually involves creditors agreeing to reduced monthly payments based on what the debtor can actually afford with payments to be made over an agreed period of time.

Who Arranges Debt Management Plans?

Given that debt management plans are informal in nature, anyone can try to set one up. A debtor could simply write to their creditors individually and try to organise one. However, many people choose to go to debt management companies who organise the plan for them. This is because good debt management companies have plenty of experience in negotiating with creditors and some lenders much prefer to deal with debt management companies. Using a debt management company also means that you can make one simple payment each month to the company, who will then distribute it to your creditors on your behalf. This makes repaying your debts a very simple process.

Am I Eligible for a Debt Management Plan?

If you’re struggling to meet monthly repayments on debts owed to multiple creditors then debt management could be for you. Get in touch with MoneyBright to find out how you could benefit.