Debt Management UK

Debt Management, as defined in the UK

Debt management, as defined in the UK, is a course of action where a reduction in repayment amount and/ or interest charges is negotiated with unsecured creditors, when you are no longer able to meet your repayment requirements.

For some background, it's interesting to note that in the UK 18% of households are in arrears and are unable to pay their credit bills or make monthly payments on time. According to recent UK statistics, in the 12 months after personal debt exceeded £ 1 trillion for the first time in July 2004, total personal debt in the UK has risen to £ 1.1 trillion. This amount is equivalent to a £ 1 million increase every 4 minutes.

Aside from the harsh statistics the reality of bad debt for most people is an increased level of stress, leading to ill-health, depression or mental illness or, in extreme cases, even suicide.

For many people who find themselves in a situation where they are simply no longer able to cope with their financial obligations, a debt management solution can be used where they can reduce their monthly repayments, avoiding bankruptcy, and providing relief from the stress of being in arrears every month.

Furthermore your commitments are simplified and you will be able to deal with your creditors as a whole instead of individually.

Debtsolver offer a debt management service for individuals who are resident in the UK i.e. England, Ireland, Scotland and Wales, as well as the Channel Islands and Isle of Man. It should be stressed that debt management solutions are only available on unsecured debts, and does not apply to secured loans such as mortgages, some car finance packages, Hire Purchase agreements and leases.

If you fall into the latter category, we would urge you to contact us anyway, as we may be able to find an alternative solution.

Although debt management negotiations can take place informally, in the end you as the debtor would enter into a new contract with your creditors. You would need to provide evidence that any previous contractual liabilities can no longer be met.

This means that the you would usually need documentary evidence of a change of financial circumstances, for example due to job loss, bereavement, ill-health or other crisis that has led to a substantial drop in salary or income.

The reduced monthly payment is shared between your creditors, who benefit because they can avoid either expensive legal proceedings or court appearances, or paying fees to debt collectors. Bankruptcy can be a costly and drawn-out process in the UK, and debt management is usually a better financial alternative for your creditors, so they will often extend favourable repayment terms to avoid this.

It's important to realise that unlike debt consolidation, debt management is not a new loan; it's a negotiated settlement with your creditors whereby you will usually make a reduced monthly payment that is shared between them. Debtsolver's personal debt managers will help with the debt management process and can handle difficult negotiations on your behalf.

If you would like more information, ring Debtsolver now on Telephone 08000 434 336 (Free for UK residents only).