Debt Management – Advantages & Disadvantages

Benefits of debt management

Advantages

Reduced payments

You only pay what you can afford after paying your essential items of living such as food and rent. Your payment can be as low as £100 per month.

You have ONE monthly payment

It’s easier for you to keep track of one payment rather than having to make numerous payments to different creditors. You pay us and we forward it onto your credit companies.

Negotiations done for you

All negotiations to reduce payments to creditors are done by our advisors, the creditor is not obliged to agree to the offers proposed however they cannot turn away any payment which you make towards repayment of the debt.

Flexible plan

If your circumstances change, you may speak to your debt advisor to lower or raise your payments.

Contact from creditors

You can forward all letters and phone calls to debt-simple as we’ll respond to them on your behalf.

Interest rates and charges

As well as helping reduce your payments we will try to negotiate with your creditors to freeze interest and charges on your debts, but we cannot guarantee they will agree to this.

Informal arrangement

You are not tied into any formal contract with debt-simple. If your circumstances change and you want to pay your debts without our help then there will be no cancellation fee. Your credit companies will benefit because they can avoid either expensive legal proceedings or court appearances, or paying fees to debt collectors.

Disadvantages

Increases term of repayment

As your payments are reduced the length of time it takes to repay your debt would increase.

Difficult to obtain further credit

You may have difficulty obtaining further credit (credit cards/loans etc) in the short term, sometimes this can be in the medium to long term as well.

Cannot guarantee all creditors will agree

As a debt management plan is not legally binding we cannot guarantee that creditors will agree to the repayment offers we propose, however they cannot turn away any payment you make.

May still get contacted by creditors

Although we would deal with any correspondence you receive from your creditors, on some occasions you may find the creditors continue to contact you directly.