Debt Management Plans
Debt management is one of the most popular solutions to a debt problem.
A Debt Management Company, after analysing you income and expenditure, will calculate a contribution that you can afford to pay monthly to your creditors. You pay the contibution directly to the debt management company and they in turn distribute the sum equally to all of your creditors.
Instead of you speaking to your creditors yourself to arrange the plan the Debt Management Company will do this for you.
| Advantages of Debt Managment | |
| • | You make only one affordable monthly payment direct to the debt management company. |
| • | They divide the payment fairly between all you creditors. |
| • | You don’t have to contact you’re your creditors yourself, the debt management company will complete all negotiations and administration on your behalf. |
| Disadvantages of Debt Management | |
| • | Some Debt Management Companies charge an upfront fee which can be quite high. This leaves you with less money to pay off your debts. Some simply take the first monthly contribution you will normally make throughout the plan. |
| • | Most Debt Management Companies also charge an administration fee to the customer each month. This leaves you with less money to pay off your debts. |
| • | The repayment of you debt will take a number of years, some run in excess of ten years due to the size of the debt and the small contribution that is being paid monthly. |
Self Help Plans for Debt Problems
You can of course contact your creditors directly and try to negotiate with them yourself.
This can have some success, but more often than not as they do not recognise you as a financial body or agent, you are not always given the business protocol or respect to amicably resolve the issue.
The process is also lengthy through much personal correspondence which can further add to the existing problem.
If you have access to capital you may also be able to offer a full and final settlement normally at a discounted rate if you can prove your inability to pay the full sum required.
DAS (Debt Arrangement Scheme)
Debt Arrangement Schemes can assist you stopping creditors enforcing legal action and giving you time to pay with looming court orders. If the proposals are deemed fair and reasonable the creditors cannot block the scheme becoming effective. All interest charges and fees on your existing debts will be frozen from the date your DAS is approved, and also written off when the plan is complete.
To apply for this scheme you need to contact your local Citizens Advice Bureau or Money Advice Centre.
| Advantages of Debt Arrangment Scheme | |
| • | All of your creditors freeze the interest and then write it off when you have made the final payment. |
| • | You have protection from any legal action from your creditors. |
| • | Your home is not affected. |
| • | You pay what you can afford. |
| Disadvantages of Debt Arrangment Scheme | |
| • | The scheme may last for many years until the total debt is completely repaid. (1 to 20 years or more). |
| • | You can only apply for the scheme through Citizens Advice or the Money Advice Centre. |
| • | It may also take some time to arrange an appointment due to the small number of advisers that are available. |
| • | The scheme its self may also take some time to be set in motion due to the very high volumes currently being processed. |
We offer debt management solutions, debt arrangement scheme help and self help solutions throughout the whole of Scotland covering all areas of Glasgow through to Hamilton, Motherwell, Coatbridge, Irvine and Ayrshire. We are also available in Aberdeen, Dundee, Falkirk and Stirling. First Debt Advice Scotland have meeting sites throughout Scotland, or can arrange a home visit.
Just pick up the phone Text you Name to 07786 522 831 or call our Freephone Number 0800 169 9945 or fill in our Enquiry Form and make the first step towards freeing yourself from debt.
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