Professional debt management
Is it worth paying for professional debt management?
There has been discussion after discussion about which solution for people with impaired credit is the best for both creditors and borrowers. Professional debt management plans are seen by many as a lifeline, especially when all attempts to resolve their debt problems themselves have failed - others see debt management as companies preying on people who need help, as it is well known that debt management plans could be instigated without the need to pay a third party company. With that said we have to way up the pros and cons of a company dealing with your debts and
if the benefit derived from using a professional debt management company would out way their costs as opposed to doing it yourself with your results potentially being less favourable then the results that a professional debt management company could provide.
Do I have to pay for professional debt management?
You do not have to pay for a debt management plan to be arranged, however if you want a professional debt management company to deal with your debts it is likely they will need paying for their services. What were trying to say is that, you may be able to arrange payment arrangements with your creditors yourself if you can deal with negotiating the monthly payments and the potential pressure debt collection firms may place you under. A professional debt management company will put in place a debt management plan, a plan to managing your debts for life or until they are repaid - the company will have departments set up for dealing with creditors and may even speak to the collection companies so often that they are on first name terms with them which may result in them getting payments arranged far quicker and with less hassle than you could yourself, you may find a debt management company can get payment arrangements agreed where you have had them refused.
What benefits will a company provide that I can not do myself?
This is a tricky questions because it will depend on how much you now about debt related issues and how much effort and time you are prepared to put in to sort everything out - with that in mind we will be speaking in general terms only.
The main questions you need to ask yourself are as follow:
- Can I deal with the creditors whilst keeping calm
- Will I be able to put creditor letters together
- Can I work out creditor payments which are likely to be accepted
- Do I have the time to deal with my creditors on an ongoing basis
- Do I want to deal with every phone call and letter I receive
- Will I be able to ensure I can afford to live whilst repaying my creditors
- Will I be able to negotiate to help stop further charges and interest being added to my creditor accounts
If you can do most of the things above then you may be able to get similar results to a professional debt management company, if not then you may want to think about the questions a little more closely.
Lets break these questions down and see what a professional debt management company should be able to achieve, for obvious reasons we will not be asking if a professional debt management company can keep calm whilst dealing with your creditors - we will assume they can.
Letters to creditors from a debt management company
The letters provided to your creditors from a debt management company will more than likely be in a preset, pre approved format which your creditor should find easy to understand with little room for misreading the information contained within.
Creditor payments made through a debt management company
All creditor payments offered to your creditors will be pro-rate which means each creditor will receive a fair payment of what you can afford based on the amount you owe them. With a professionally drafted income and expenditure form showing what you can afford its unlikely the creditors would argue with the payments being offered.
Dealing with creditors on a daily or monthly basis and making the time to sort everything out.
A debt management company will employ people just for this purpose. They will have trained professionals to deal with your creditors so you wont have to. Any phone calls or letters you receive from your creditors should be passed onto the debt management company for them to resolve.
Can you afford to live whilst making payments to creditors?
We have spoke to many people who have been unable to maintain their payment arrangements due to needing the money for life's essentials. A professional debt management company will ensure all living costs and other priority payments are taken into consideration before working out any payment offers to your creditors - doing it this way will ensure you can maintain a reasonable standard of living whilst repaying your creditors.
Can a debt management company stop creditors adding fees or further interest?
The decision as to whether further interest and additional fees are added to your debts will reside with the creditors themselves. It is likely that in the very early days of debt management your creditors will be less inclined to stop adding fees or interest until they are able to see a commitment from yourself to any new arrangements made. Once the debt management plan has been operating for a number of months they will be more open to freezing interest etc. A debt management company will again have people in place to deal with your creditors and will regularly review your accounts and speak to your creditors to encourage them to reduce or stop fees and interest being added - generally speaking they will usually get better results with this than if you were to speak to a creditor directly.
We hope the above has answered a few questions regarding debt management and whether it would be worth it for you in paying a debt management company to look after your debts - if you require further information simply fill in the form at the top of this page and we can arrange for a professional debt management consultant to call you back.
