Debt Management Pros and Cons

If you're trying to decide whether to join a debt management plan, you need to know the pros and cons. For some people, debt management is a really helpful way to repay unsecured debts like credit cards, loans and overdrafts. For others, it's simply not suitable.

Our list of debt management pros and cons should help you to make an informed choice about whether a debt management plan with All About Money is the best way forward for you. If you would like more help or information, you can call one of our advisers for a chat.

Pros of Debt Management

  • Will reduce your monthly debt payments to a manageable level.
  • Simplifies your finances with one monthly payment, which can reduce stress and help you avoid non-payment or late fees (something which may affect your credit rating and/or lead to legal problems).
  • Personal point of contact for all your enquiries - your Personal Finance Manager.
  • We deal with your lenders for you.
  • May be able to freeze interest and charges, meaning your repayments go towards your debt and not paying off interest.
  • Gives you a clear idea of when all of your unsecured debt will be repaid.
  • If debt management helps you deal with debts before they really get out of hand, you could avoid ending up in a situation where bankruptcy is the only option.

Cons of Debt Management

  • Making lower monthly payments can be recorded on your credit record for six years.
  • Making lower payments will mean it takes longer to get out of debt.
  • Repaying debt over a longer period could increase the amount of interest you pay overall.
  • Your lenders don't have to agree to a debt management plan, or agree to freeze interest and charges.
  • You can't apply for a debt management plan unless you are already struggling to repay your unsecured debt.
  • A debt management plan will only deal with your unsecured debts - it can't reduce the cost of secured debts such as a mortgage.

If you would like to find out more about debt management and how it could help you lower your monthly payments, speak to one of our advisors. Even if debt management isn't for you, we do have other debt solutions that could help, so it's always worth speaking to an advisor to find out more.

Get expert debt management adviceIf you would like more information, talk to our team today.

Speak to an expert debt adviser on:0800 195 2911

Apply for help online

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Conditions Apply. Repaying debt over a longer period may increase the total amount to be repaid. Fees payable when continuing services provided. Your ability to obtain credit will be affected in the short term and might be affected in the medium to long term. Telephone calls may be recorded for training and quality purposes. Calls to 0800 numbers from BT landlines are usually free, calls from other networks may vary and you should check with your network provider for full details of your service.

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