How Debt Companies Manage Your Finances

When you enter into a debt management plan with one of the many debt companies in the marketplace today, it’s important to know how your debts are being handled. One of the most unpleasant things about being in debt is your creditors sending you letters and calling you to demand payment. Discover how using a debt company to manage your finances in the form a debt management plan can help to ease some of the strain.

Step 1: contacting your creditors

Your creditors will be contacted on your behalf to find out an up to date balance of how much you owe. We will negotiate with your creditors to agree an affordable monthly repayment amount for you and wherever possible try to get any interest or charges frozen. Once we’ve spoken to all of your creditors we will arrange for your one monthly payment to us to be distributed amongst them accordingly.

Step 2: keeping you informed

To give you peace of mind and reassurance that your payments are being made as agreed, we will send you a detailed statement each month showing which how much each creditor has been paid. This monthly breakdown will be clear, easy to understand as well as showing you an accurate balance of how much you still owe each of your creditors.

Step 3: dealing with creditor correspondence

During the course of your debt management plan you can still expect to receive statements from each of your creditors detailing how much you owe them. When your debt management plan is being set up you may get letters and phone calls asking for payments. If you do receive these, explain the situation to your creditors and then contact us with copies of any correspondence.

Step 4: changes in your circumstances

If your financial circumstances change at any point during the course of your debt management plan it’s critical that you tell us immediately. Whether your monthly income has gone up or down you need to inform us straight away so that we can calculate if it’s going to affect your agreement with your creditors. If your monthly income has gone up significantly it’s in your own best interests to resume full payments on your debts as ultimately you will be able to pay them off much quicker.

Step 5: preparing for the future

It’s important to keep in mind that a debt management plan is not legally binding on you or your creditors and is only intended to be a short term measure. While your debt management plan is in place it’s important to make arrangements for being able to cope with your full debt repayments as you will have to resume these sooner rather than later.

Summary

The key to a successful debt management plan is communication between your debt company, your creditors and you. Being clear about how the debt management process works from the beginning will ensure that you can manage your money more efficiently without any unwanted surprises along the way.