Debt management is something to consider when your personal circumstances change meaning that you can no longer afford to pay all of your unsecured creditors each month.
An independent debt advisor will go through all of your outgoings with you to determine whether you can prove that you can't meet all of your loan liabilities. They will then work with you to find a monthly amount that you can comfortably afford to pay.
The debt advisor will then take this proof to all of your lenders and informally negotiate with each of them to reduce the monthly payment and/or the rate of interest charged. Each month you will send just one amount to the debt specialist who will then pay all of your creditors on your behalf. Throughout the term of the management plan, you will receive regular statements detailing the outstanding balance and the amounts paid to each creditor during the period.
As a result of these negotiations, you may end up increasing the amount or the term of the debt and this may also have an impact on your credit rating.
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