Will I get a better deal if I shop around?
The principle purpose of a Debt Management Plan is to enable the repayment of Non Priority Debts at an affordable rate after covering all of your essential living costs. In order to calculate the amount you can afford each month, we need to review with you all of your household income and understand what bills you have to cover in order to keep the roof over your head and food on the table. As a result of this review we will come to a figure which is left over after your household costs, which can then be put towards your unsecured debts – such as credit cards, personal loans, mail order catalogue debts and so on.
Assuming that you have told us about all of your income and household costs, together with details of your Priority Debts, the figure at the end of the calculation should be both affordable and comfortable within your budget. Therefore that should be the amount you should pay towards your unsecured debts if you are committed to repaying these.
Bearing in mind these points, there really is no such thing as a ‘better deal’! It is true to say that there are some fee charging debt management providers who will reduce the monthly payment to your debts by ‘dressing up’ your Income & Expenditure figures, but this has a few knock on problems:
- A reduced monthly payment will extend the repayment period and you need to consider if this is something you really want.
- A lower monthly payment could mean that your creditors are less co operative and continue to pursue you for further payments, which removes one of the benefits of a Debt Management Plan
- Creditors do review the various costs detailed in Income & Expenditure Statements, and will challenge any cost that they feel is ‘unreasonable’. As a consequence, you may run the risk that the Payment Proposals are rejected potentially resulting in continued charging of interest, fees and contact. This will extend the payment arrangement considerably and effectively be self defeating.
Be very careful about opting for what you think is a ‘better deal’; the above risks are real and could make the difference between a future without hassle, and one of continuing pressures.
At National Money we have very good relationships with creditors, partly because they recognise that we carry out our reviews of Income & Expenditures fully and properly, and this is a great help in securing agreements to the offers we put forward on behalf of our clients.
Call us on 08448 247 260 or ask us any Debt Management questions using the form below:
