What Are Debt Management Plans?
Debt Management Plans are informal arrangements set up with your creditors to pay them back what they are owed in regular installments, usually at a reduced rate. While it is possible to set up such arrangements with each creditor yourself, a Debt Management Plan involves using a Debt Management Company to deal with your creditors and negotiate with them on your behalf. The advantage being that they are obviously very experienced in negotiating substantial reductions, and the new terms they agree should more than make up for the fact that you have to pay for their services. This can be particularly useful if you are not confident about negotiating with creditors and you want to be free from the hassle of your creditors chasing you. While some debt management plans can appear to be free, the debt management company will usually build their fees into the monthly payments that you have to make.
