There are debt solutions that can help with all kinds of debt, and if you`re struggling, finding the right one for your own circumstances is important.
If you`re struggling with only secured debts, a debt management plan won`t be able to help you - but if you also have other (unsecured) debts, then it could help to reduce these repayments to make more `room` for payments towards your secured debts.
A debt management plan is designed to make unaffordable unsecured debt repayments affordable again. Every month, you`ll pay as much as you can towards those unsecured debts after your other essential costs (things like groceries, bills, payments towards your secured debts, etc.) have been covered.
This will mean your unsecured debts take longer to pay off - but also that your monthly repayments should be affordable alongside all your other costs.
And it`s common for unsecured lenders to agree to freeze or reduce interest and other charges on a debt management plan, which can stop your debt from growing and ensure that more of each payment you make goes towards paying off the debt itself, rather than interest. Unless they do freeze interest, however, repaying a debt more slowly means you`ll end up paying more in the long run.
Just keep in mind that repaying a debt more slowly than originally agreed can affect your credit rating - and that your lenders are under no obligation to agree to the debt management plan. They are likely to do so if they can see that your existing arrangements are unaffordable, and that a debt management plan is the most realistic way for you to pay back what you owe.
A debt management plan takes care of your non-priority (unsecured) debts. This means that secured debts (which are considered priority debts) can`t actually be included in a debt management plan, although your unsecured debt repayments will be rearranged to fit around your secured debt repayments and other essential expenses.
Some debt management companies may also speak with your secured lenders to see if there is anything they can do to help you.
If you want to know more about debt management - or any other debt solution - click here or call our expert debt advisers on 0800 195 2911.
Answer a few simple questions and we'll give you an instant recommendation on your best way out of debt.
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Tags: debt, debt management, secured debts, debts secured, secure, unsecured
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