There is no magical, mystical and ready-made formula available to lower your debt burden. The best solution is your common sense and having a plan for your own budget. Good plans aiming to reduce debt burden are 80% about your financial behaviour and 20% about financial knowledge. It is not a rocket science that will immediately propel all your debts in one shot. However, reducing your debt burden is easy though it takes time. Your behaviour during this period is the greatest factor for the plan's success.
Debt management agencies are springing up everywhere in the UK. These companies help you to manage your debt by taking one monthly payment from you and distributing this money among your creditors. They consult and work with the lenders to lower payments and interest rate.
Sometimes people get confused with debt management plans and debt consolidation loans. They are different as the programs for debt minimisation also include debt advice, consultancy and future guide lines.
You may be interested in knowing how these plans work and what are the steps involved. Under debt management plans, you will avail free, confidential consultations with a professional financial expert on any time of your convenience. No matter where you live, you can have the advice as most of the agencies offer online services. During the plan, you have to discuss your financial status with the expert. During discussion, the counsellor scrutinises your income, living expenses and debts in detail. Then only, the expert offers information and suggestions for dealing with debt issues such as, credit card bills, past dues, taxes or student loan delinquency, or credit accounts sent for collections.
During debt management plans, the financial experts go through your financial status analytically. After that they prepare a financial Statement and budget. An affordable monthly payment is arrived at with your consent. Then only they negotiate with your creditors to alter the terms and conditions. May be, 90 out of 100 times, the creditors agree with these plans as they are more concerned about getting back their money. An easy repayment option facilitates regularity in instalment payments. Hence, the lenders agree with the plans and offer an opportunity to the borrower to become regular in repayment. The agency taking care of your debt burden collects instalment from you and distribute 100% of your payment to your creditors. Debt loans are also part of the plans and consolidation decreases the overall debt burden on your shoulders.
