Debt solutions for people with unmanageable unsecured debts can be a big help, but they are only available to people who really need them - if you don`t meet the criteria, a certain debt solution might not be available to you.
You will need to speak with an expert debt adviser about your situation before you can decide whether a debt management plan is right for you. If it`s not, they can point you in the direction of a more suitable approach to your debts.
When it comes to debt management, different lenders may have different ideas about what`s reasonable, but in general you could be eligible if...
Your debt repayments have become unaffordable To qualify for a debt management plan, you will have to demonstrate that you can no longer afford your existing unsecured debt repayments.
Assuming your creditors accept it, a debt management plan will enable you to reduce your debt repayments to an affordable level. Whatever`s left of your monthly income after essential expenses have been taken out (not including payments to your unsecured debts) will go towards your unsecured debts each month. If your income or your costs change, your debt management payments might change too.
Note that repaying your debts more slowly can affect your credit rating and add to the amount of interest you`ll pay overall - although your lenders may agree to freeze interest while your debt management plan is in progress.
You will still have to make payments every month during your debt management plan. As such, you`ll need to be earning a regular income, and you must be able to make a payment of a reasonable amount each month.
The ultimate goal of a debt management plan is to repay your debts in full. As such, you must be realistically able to pay everything back within a reasonable period of time.
There is no set period of time for which lenders will allow a debt management plan to run, but as a rule, the longer it`s going to take you to pay everything back, the less likely it is that debt management will be a suitable approach.
If you want to know whether a debt management plan might be right for you, take our free debt test and we`ll give you an instant recommendation on your best way out of debt.
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