Finding a Debt Repayment Plan

Finding a debt repayment plan can be much easier if you enlist the help of a reliable debt management company. Debt managers can evaluate your current resources, your monthly outgoings and your existing debts to help you find the plan that’s best suited to your circumstances. No single debt repayment plan is appropriate for every consumer. The best plan for you accommodates your income and enables you to pay off your loans at a manageable rate.

Choosing a Debt Management Company

When you search for a debt management company, it’s important to find a reliable organisation with the proper affiliations and credentials. Unfortunately, unscrupulous debt managers may take advantage of consumers who looking for reliable debt advice and are worried about the consequences of debt, such as home repossession or bankruptcy. The company you choose should adhere to the standards of the Office of Fair Trading, or OFT, an agency that enforces consumer protection laws and monitors the activities of companies that handle consumer debt.

According to the Consumer Credit Act of 1974, a company that provides debt counselling, purchases debt or issues loans to consumers must hold a credit licence from the OFT. Companies must prove that they have the necessary expertise and resources to cope with their clients’ financial concerns in order to maintain their licence. In addition to holding the necessary licence, a reliable company may be affiliated with the Debt Managers Standards Association, a trade association that upholds an ethical code of conduct in debt management transactions.

The debt management company you choose should have a substantial amount of experience in credit counselling, a proven record of helping consumers resolve their debts and a strong reputation in your community. When you’re searching for a debt repayment plan, it’s crucial to have a debt manager you can rely on to accurately analyse your financial situation and recommend the most appropriate plan for your circumstances. A debt repayment plan with unrealistic terms or conditions has little chance of success.

Debt Repayment Options

When you’re searching for a debt repayment plan, a knowledge of your options will help you make an informed decision. A debt repayment plan is best suited to an individual or family that has a steady source of income. The debt repayment plan should allow adequate funds for the cost of food, rent or mortgage payments, utilities, transport, clothing and other necessities. Debt management companies will attempt to negotiate your debts with your creditors in order to reduce the amount you owe or lower your interest rates; however, reductions are not guaranteed.

An Individual Voluntary Arrangement, or IVA, is a more structured, binding agreement, which must be arranged through a licensed insolvency practitioner. With an IVA, you may repay your debts at a reduced rate over a certain period of time, usually 5 years. At the end of this term, the remainder of your debt is written off. With an IVA, you are able to retain ownership of your house, although some IVAs include the provision that the equity in your home must be released at the end of the agreement to repay your creditors.

Finding a debt repayment plan can relieve you not only of your financial obligations, but of a tremendous amount of worry. The key to finding a successful debt repayment plan is to consult several debt management companies before you make a decision. Depending on the type of plan you choose, you may be able to reduce your obligations or cut your interest rates considerably. A reliable debt management company will make every effort to find a debt repayment solution that fits your means.