How long will it take to repay my debts?
A Debt Management Plan is based solely upon the amount you can reasonably afford to pay each month from your income after you have covered all of your essential living costs. Consequently everyone’s situation is different and we will work with you to reach a figure you can afford within your monthly budget.
At National Money we do not believe that it is sensible to establish a Debt Management Plan that takes a life time to repay your unsecured debts but the principle purpose of such a Plan is to make any debt repayments affordable for you.
Once we have completed a full review of your financial situation and your personal circumstances, we will agree with you a payment figure that is right for you. Once this amount has been worked out, we will give you an indication of the length of time it will take you to clear your unsecured debts, taking into account an assumption that all of the creditors will agree to the freezing of all interest and other charges.
It is important to understand however that not all creditors will agree to such a request, at least in the short term whilst you build up a track record of regular payments, and many lenders have differing policies on this point, hence the reason why we can only give an indication. Similarly we will need to obtain confirmation from the lenders of the outstanding debt balance in their books which may change the repayment term we envisage.
Throughout the life of the Debt Management Plan we will review your financial situation at regular intervals to ensure that you can continue to afford the payment level originally agreed with you. Where you are able to pay more towards your unsecured debts, when for example you are promoted at work with a pay increase, we will always recommend that you increase your payments as this can make huge reductions to the length of time of the plan.
Many clients use the facility of a Debt Management Plan as a way of ‘buying time’ whist they await something that will change their financial position, such as the sale of their house, payment of a bonus from work etc. Pending this development, they may be unable to meet the repayments required by the lender, but do not want to avoid their payment responsibilities and a Debt Management Plan is an ideal way of dealing with this short term problem.
Unlike Individual Voluntary Arrangements (IVAs), which are fixed term, legally binding contracts, there is no set term of a Debt Management Plan, and you will continue to pay to the Plan every month until the debts are fully repaid.
Call us on 08448 247 260 or ask us any Debt Management questions using the form below:
