Not everyone with debts has a debt problem . Many people owe a reasonable amount that they're paying off at a rate they can comfortably afford. If you're in that situation, you might even be able to clear your debts more rapidly than expected - by paying more than you have to every month.
Then there are the people who know they have a problem - the ones who can't afford their monthly payments and/or can't imagine themselves clearing their debts in the foreseeable future.
There's also a third group: the people who aren't sure whether they're in control of their debts or not. If that sounds like you, it's best to talk to a professional debt adviser, who can help you take stock of your situation and figure out what kind of approach you should take to your finances.
If you're not sure it's worth talking to a professional, ask yourself a few questions:
• Do you owe more today than you did a year ago?
• Do you always make just the minimum payment to your credit card debt(s)?
• Do you use one credit card to pay off another?
• Have you missed payments to any of your debts in the last six months?
If you answer 'yes' to these questions, it sounds like you could do with some advice. A debt adviser can help you make sense of your finances. For example, they can help you figure out exactly how much you have coming in on a monthly basis, how much you spend on your debts and your everyday living costs, and whether you should look into the debt solutions that could help you - such as a debt management plan.
Who can debt management help?
A debt management plan is a debt solution designed to help people who can no longer afford their payments towards their unsecured debts - credit cards, overdrafts, unsecured loans, store cards, etc.
How does debt management work?
A debt management plan involves negotiating with your unsecured lenders and asking them to accept lower payments - a percentage of the money that's left once you've accounted for mortgage (or rent), food, petrol, utilities, and so on.
Not everyone feels comfortable doing that, and many will ask a debt management organisation to do it on their behalf. There may be a fee for this, so if you do, it's important to understand exactly what that organisation would be doing for you.
Why would lenders agree to a debt management plan?
Lenders aren't obliged to agree to a debt management plan. However, if they think it's the best way to recover the money you owe them, they're quite likely to. Debt management involves repaying everything you owe - just more slowly than you originally planned. (Your lenders might also agree to freeze or at least reduce interest and other charges while your debt management plan is in progress, but be aware that if they don't, repaying a debt more slowly will cost you more as it'll have longer to accrue interest.)
And be aware that they might still issue a default notice since you're not repaying your debt as you originally agreed. An entry on your credit report will stay there for six years, and can make it harder and/or more expensive to borrow money in that time.