Money problems and calls to debt management companies traditionally increase in the New Year.
One of the main confusions is exactly what a debt management company can do for someone facing a financial crisis.
Many borrowers mistakenly believe their debts are written off with the help of a debt management plan.
This is not true.
Only an agreement between a lender and the borrower can alter the terms of a finance agreement.
A financial management firm can act as the borrower’s agent, but cannot write-off borrowings.
What a financial management company can do
So what does a financial management firm do for someone struggling with debt?
• A debt adviser can negotiate with a lender to reschedule debt repayments. In many cases, this will involve a lower payment over a longer term with charges and interest frozen.
• An adviser can help with budgets and long-term financial goals
• If a financial management plan is not a good solution for a borrower, a debt adviser can discuss insolvency options, like debt relief order (DRO), IVA s (individual voluntary arrangements) or bankruptcy
Another big part of the job is ensuring fair play by lenders and debt collectors by making sure they do not break any rules or exert undue pressure. This gives many individuals worried about the finances peace of mind.
What to do if you are worried about debt
The overriding principle is debt management companies help individuals cope with their financial problems, but cannot promise to write off their debts with no questions asked.
Sometimes, a lender may agree to write off a debt, but typically, a financial management plan relates to negotiating reduced payments, while a debt relief order, IVA or bankruptcy may cover writing off unsecured borrowing.
If you are worried about your debts, then talk to an impartial debt adviser about your range of financial options and how these will affect your debts.
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Notes to editors:
- Money Debt and Credit is one of the UK’s fastest growing financial solution companies.
- The company was founded in 2006 on the belief that every client has the right to appropriate financial advice. Since then we’ve gone from strength to strength and have helped thousands of people with a variety of financial solutions.
- We offer a range of services including Financial Management Plans, Loans, Mortgages, Full & Final Settlements, Bankruptcy, Investments and Pensions.
- Specialties: IVA s, Financial Management Plans, Loans, Mortgages, Trust Deeds, Full and Final Settlements, Bankruptcy
For more information or debt advice contact:
Money Debt and Credit
45 Clarendon Road, Watford, WD17 1SZ
Tel. 0800 16 999 46
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