How Could Debt Management Work For You?
Think Money can provide debt management ( http://www.thinkmoney.com/debt/debt-management/how-we-manage-your-debts.asp ) information and advice ( http://www.thinkmoney.com/debt/debt-management/debt-management-faqs.asp ) on dealing with debt through a debt management plan.
Debt management is one of the ways you could become debt free at a pace that suits your financial situation. Debt management programmes are available from many debt management organisations.
Different organisations run debt management plans differently. The 5-step plan below guides you through one of the ways a debt management plan can work.
1. The first step is making a phone call and speaking to a debt adviser. An experienced adviser can help you decide whether debt management is appropriate for you. Your debt adviser will ask you how much you earn, how much you spend, how much money you owe, and who you owe the money to – among other things.
2. The next stage of the process involves you and your debt adviser working together to start getting you out of debt. They will assess your situation, and work out a realistic plan for repayments to your creditors.
3. After their conversation with you, your personal debt adviser will then try to negotiate a lower rate of repayment with your creditors. There’s a good chance they will agree to the new repayment rate if they think they are more likely to get their money back by allowing you to pay it back at an affordable rate.
4. If the negotiations are successful, you will then pay one affordable monthly sum to your debt management organisation. The money you have paid will be distributed between your creditors according to how much you owe each of them (this is known as a pro rata payment). Remember, your personal debt adviser is there to help, and will re-assess your situation at regular intervals to ensure you are still able to afford the payment. If something changes that may affect the amount you can pay every month, you can request changes to your plan. Both you and your creditors have the right to opt out at any time.
5. If your income increases during the debt management plan, you can inform your personal debt adviser and ask them to negotiate a higher rate of payment with your creditors. You should only do this if you feel you can realistically commit to paying more than you are already doing.
A debt management plan is a good way of controlling your debt and getting your finances back under control. For some, debt management plans are extremely effective because essentially, the temptation to spend is taken away.
Most of the services reviewed by this website are available or may be accessed from Australia (see 