If your debt has reached unmanageable levels and you can no longer afford to meet the monthly repayments there is action you can take. There are a number of debt management companies in the UK who can give you the expert help and advice you need to clear your debts. Here are some of the advantages and a few disadvantages of joining a debt management plan.
Advantages
1. The first benefit is that you will not have to deal with aggressive and demanding creditors any more. Instead the debt management company you join will deal with all correspondence except for a few legal notifications.
2. Debt management plans are designed to be flexible and meet your changing circumstances. So if in the future you want to increase your payments or even put a lump sum towards your debts you can do it
3. You repayments each month will be significantly reduced often by as much as 75% of the original total.
4. If you are being continually being charged for late or missed payments you will know how annoying it can be. Joining a debt management plan will stop any further interest and charges being added to the amount you owe.
Drawbacks
1. Joining a debt management plan is going to damage your credit rating in the short to medium term and may make it harder to get credit in the future.
2. Your debts will take longer to pay back and it may be more expensive to do so.
3. Your debts will not be written off and will have to be paid in full.
4. There is a chance that all of your creditors may not agree to your joining a debt management plan. However this is quite rare and most companies will accept the proposal.