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If your financial problems have reached the point where you do not see a way out and you feel as though you are drowning in debt, your best way out is through declaring bankruptcy. Filing may well allow you to get your finances back on track Thankfully, there are now several web sites that are there to help people like you with bad credit to find the fast personal loans that you need. When you have bad credit, the first thing that you should be looking for is a loan company that
What is a Debt Management Plan?A Debt Management Plan is an arrangement you make with those you owe money to (ie your creditors), organised and usually run by a debt management company, which allows you to reduce your monthly payments to an amount you can afford. These arrangements are often called informal arrangements as they are not legally binding. Theyre generally suitable for people who only really need them for the short to medium term; to cover maternity leave or a loss of overtime for example. Debt Management Plans are designed to manage your unsecured debts, including credit card and store cards, overdrafts and unsecured loans.How much can I afford?The amount you pay is worked out by adding up all your monthly bills and reasonable living expenses, and deducting this total from your monthly income. The money left is known as disposable income, which you send to the debt management company each month. They then pay your creditors for you. Advantages of a Debt Management Plan Debt Management Plans allow you to start paying creditors with a single, affordable payment each month. You wont need to try and obtain more credit to pay your debts. As an informal arrangement they can be used as a short to medium-term solution. If you get phone calls or letters from your creditors, you can pass them on to the debt management company, who will deal with them for you.Disadvantages of a Debt Management Plan Your credit rating (ie your ability to get loans etc in the future) will be affected and, in general, you will be asked not to use your credit cards or other credit while in the arrangement. As youre paying less towards your debts each month than originally agreed with your creditors, it may take longer to pay back your debts. Although your creditors dont have to freeze the interest and charges they apply to your debts, theyre more likely to do so with a strong case and if you work with a credible debt management company.Whilst we make every effort to ensure this article is as up to date as possible, Accuma cannot be held responsible for changes in legislation or developments in case law since this article was produced and published. Article produced in June 2008.
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