If you are in debt and you are considering ways to improve your finances, one of the options at your disposal is a debt management plan, a DMP. This is a solution that has helped many people make their way out of debt and when it comes to taking control of your finances or being proactive when it comes to your finances, this is the sort of strategy that will work for many people.
There is a great deal to be said for the support provided by a debt management plan agency or professional but it isn’t for everyone. There are a number of positive and negative aspects associated with debt management plans and before you commit to this finance strategy, you need to make sure that it is the option that is right for you.
This is why we have looked at the debt management plan positive points to give you the information you need to make sure you make the most informed decision.
Debt Management Plan Positive Points
If you are looking to take out a debt management plan, these are the positive aspects you should consider.
You can avoid bankruptcy or an IVA
One of the strongest reasons people have when opting for a debt management plan is the fact that it can help them avoid being declared bankrupt or suffering an IVA. These can have a huge impact on a person and their loved ones over a number of years, so there may be a genuine reason why you would prefer to not suffer this style of agreement or finding.
For instance, if you are declared bankrupt you may be limited in the jobs you can apply or positions you can hold in companies, which means that it is best for you to deal with debt via a DMP as opposed to opting to be declared bankrupt.
You may be able to avoid a County Court Judgment
Similarly, if you can avoid receiving a County Court Judgment, a CCJ, you are advised to do so. This is because this ruling can count against you in years to come, limiting what you are able to do. Even if you do have a DMP listed against you on official records, it will have less of a negative impact than many of the other judgments you may suffer from.
Creditors may be willing to freeze interest payments
If you are looking to take out a DMP it is because you hope that your finances will be improved or the amount of money that you pay off will be reduced. With this in mind, a big positive from agreeing a DMP can come with the fact that many creditors will agree to freeze the interest payments associated with the debt. This can significantly reduce the amount of money that you need to pay off.
The money you pay each month may be reduced
Ideally, you should be looking to reduce the amount of money that you pay out each month. This is the most straightforward way to giving yourself more financial freedom or leeway, and this is something that many people are able to obtain when they take out a debt management plan.
You don’t have to deal with creditors directly
For a lot of people, the most important reason to use a debt management plan comes with being able to avoid dealing with creditors. A lot of people struggle to deal with their creditors in a face to face manner. This can add a great deal of mental stress and pressure to a person, which is the last thing you need on top of financial difficulties.
Hiring the services of a debt management company to act as the “middle-man” will take away a lot of the stress that you experience, so you should consider this to be the ideal solution to your difficulties.
You can benefit from the experience of your DMP agents
There is also a lot to be said for the fact that your debt management provider or agency has great experience in dealing with these problems. This means you’ll be able to take a shortcut to financial security by using their advice and guidance.
There is a great deal to be said for learning from someone else’s mistakes as opposed to learning from your own.
Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.