Managing debt effectively is a dream for many. By doing that you take control of your financial life and make it much easier. However, this requires planning and strategy. 

Today I will be discussing how to choose the right debt management company for you.

Let us begin.

What is Debt Management?

Debt management is a term related to personal finance technique, which helps to manage debt and control it. A Debt management plan is a technique through which you can comprehensively try to manage your debts

A Debt Management Plan is an agreement between a debtor and a creditor. This agreement is used to define terms of an existing or a new debt that might take place in the future. 

Debt Management Plan is also used as a contingency planning technique and as well to safeguard the interests of both parties. The agreement or plan can be drafted through debt management companies. 

Debt management companies take a fee-charging for their services and draw out a plan for you and provide debt advice and solution as well.

Find your best debt solution

This 4 question debt calculator will tell you if you’re eligible.

What is the total amount of your debt?

Why Do You Need a Debt Management Plan?

Many things emphasize solid personal DMP. These factors play a great role in your financial life and I have listed some of them below:-

Credit Score

One of the most important things in your financial life is your credit, Loans, finances, and mortgage all are done after reviewing your financial score or the credit report that is placed in your file with all the relevant credit history and information. 

Your debtors hold much importance to your credit score, as it is a reflection of trust and management.

DMP helps you to improve your credit rating and income. It also saves you from mismanagement of debts which surely shields your credit rating. 

Financial Freedom

If you are struggling with debt and need a solution to live a debt-free life without any money problems, DMP and debt counselling also play an important role here. 

The first step towards achieving your financial freedom is getting out of the debt spiral. DMP works to enhance management and make it effective to make debt payments. This automatically results in the elimination of bad debt. 

However, getting into a DMP doesn’t mean that you will instantly have financial freedom. This might be the first step towards it. Make sure that you take action to achieve your goals through proper advice of debt counsellors and by getting debt help.

Debt Management Companies 

To get proper debt solutions, I would advise you to seek out a debt management company

One of the important services of these companies is to handle debts on your part and there to make debt management plans. The debt counsellors provide good money advice on financing and income as well.

These companies also provide various services, such as making monthly debt payments, handling your bank account or income.

What to Look at while Selecting a Debt Management Company?

Before selecting debt management companies or debt management plans, do make sure that they are authorised and regulated by the financial conduct authority of the government of the UK.

 Do see that they are a legal organization and are registered in England as a limited company or a sole company. (Tip: Do seek out if they have a registered office or website)

The second thing you would like to focus on is the debt management company and you are on the same page. That means your demands meet with the services that they support. 

Your demands might be concerned with the following:- 

Services

First of all, you should see what services are being provided by the debt management company. Management companies have several different services in their portfolio that relate to debt solutions, such as money advice, management plans, contingency planning, etc. 

Choose the company that is right for you and support your demanded debt management service.

Costs

The second important thing is the costs that are affiliated with debt management companies. You need to weigh all the costs that might be incurred, the related direct and indirect costs. After this, make a prudent decision of selecting a debt management company. 

I would advise you to not choose any debt company whose fees exceed your budget. Stick with the fees that you can afford to pay

Content Strategy

Last but not least. The strategy and the content of debt management might be the most important thing. If the company is not providing the best debt solution or money advice to you, all of your spending on fee-charging and expenses might be in vain. 

I would advise that you learn a little about personal financing and accounting to make a sound decision regarding the debt advice that the company gives you. 

debt management companies

FAQs

Do Debt Management Plans Work?

Yes! If you properly execute them and hold on to the core principles of debts. You might be able to get the financial freedom that you have been starving for.

Are all Debts Manageable?

An effective strategy makes it easier to manage debt, however, at times some debts are too large or complicated to handle on your own. Such as corporate financing, in these cases, professionals are hired to manage the debts.

Where to Get Free Debt Advice in the UK?

You can use national debtline. National debtline provides much assistance in advisory relating to debt and management. You can also email them at their respective email address or call them on their phone number from Monday to Friday.

What are the Fees of Debt Management Firms?

There are different fees for different services and plans. You can check them out on the company’s website.

Is Individual Voluntary Agreement the same as Debt Management?

No. IVA is not similar to Debt management. IVA is signed to save you from bankruptcy and manage your debtors and creditors. I have covered IVA in great depth and you can check it out on my website by clicking here.

Wrapping it Up

Choosing a debt management company is a tricky task, however, if done properly you might be able to land the best deal. 

Whatever organization you choose, do see that they are working on a legal frame and are authorised by the financial conduct authority and are providing sound money advice service. 

I wish you luck in choosing your partner in your financial money life. 

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
×
×Find your best debt solution SEE IF YOU’RE ELIGIBLE