Debt Management Program

A debt management program consolidates all your unsecured debts into a single affordable amount that you can pay monthly. This monthly payment is made to the creditors over an agreed period of time. A trained debt consultant will help you in calculating the amount for this payment. This will be done after your current financial position is reviewed so that it can be determined how much you could pay off comfortably. The company will take into consideration your normal cost of living expenses before deciding on the amount that can be kept aside for payments.

There are certain things that you need to keep in mind when you go for a debt management program:

• Your debt management program should be reviewed regularly. This will help in determining the possibility of your creditor accepting an early settlement. Once you complete your debt management program, you will be declared debt free and will be able to start afresh financially.
  
• You should ensure that the debt management program will actually help you in clearing your debts in less than five years of starting the program. If not, then it would be better for you to go for a different type of arrangement.
  
• You must ensure that the debt management company you hire complies with all debt management guidelines.
  
• You should negotiate beforehand about the charges that you have to pay the debt management company.
  
• Ask the debt management company for evidence that they have secured a freeze, or at least trying to, on all interests and charges and that this continues during the debt management program.

Once your creditors agree on your debt management programme, it is your responsibility to continue to pay the agreed amount to your debt management company. This amount will then be distributed by them accordingly amongst all your creditors, for the settled duration till your debt is completely repaid. It is in your own interest that you do not fail to provide this amount. If there is even the slightest glitch in payments, it could result in cancelled agreements with the creditors. And then you would have to repay the debts in full amount. Therefore, such a situation should be avoided at all costs. If at any point you find it difficult to pay the agreed amount timely, then you should consult your debt management agency. They will then re-negotiate with your creditors.