Many people struggling to repay their debts often delay taking advice. This is a source of frustration for debt management plan advisers who recognise that during the intervening period, debts have typically escalated to worsen the overall situation of their client. This may result to an extension in the debt management plan term. In this article we’ll look at some common reasons why people delay taking debt management advice.
Perhaps the most obvious reason for a delay is the fear of losing access to credit. A debt management plan, along with most other debt solutions, will typically lead to restrictions in the ability to source credit in the future. This is of major importance to many people struggling with debt as credit can fund the costs of essentials such as food and fuel. Why is this so? Credit repayments are often made soon after payday; many people find that they have little cash left after their debt repayments are made with credit needed to cover the rest of the month.
The loss of credit may be a major concern. However, a debt management plan will result in a cessation of contractual unsecured debt repayments. Therefore cash will be left over to spend on essentials. The debt management plan budget will have prioritised cash for the basics before calculating the actual debt management plan payment. This negates the requirement for credit once the link between real income and real expenditure has been restored.
Negative creditor reaction is a further fear for those struggling to manage their household finances. Many people have heard horror stories about endless debt collection phone calls, legal threats, visits from bailiffs, loss of their home and so on. Creditors are realistic about their lending. They know a percentage of their clients will not be able to repay their debts and this is factored into their cost of lending. They also know some clients will require time and support to repay their debts. Most major creditors are supportive of a debt management plan where they consider the offer of payment to be fair and sustainable. A well-constructed and clearly appropriate debt management plan is likely to result in creditor support more often than not.
Due to adverse press coverage some people worry they’ll receive poor debt management plan advice and be left further out of pocket. There are some poor debt management plan providers operating as well as a few rip-off merchants within the industry. These issues can be avoided by refusing to speak with any debt adviser without professional qualifications (CertDR qualification for example) or any debt management plan provider who is not a member of the trade associations the Debt Resolution Forum or DEMSA. You should check their websites to make sure they have the appropriate consumer credit licence issued by the Office of Fair Trading.
The Debt Management Plan Forum (http://www.debtmanagementplanforum.co.uk/) is a place where those looking to deal with their debts, but who are still not quite sure debt management advice is the answer, can anonymously ask questions to industry experts. There are pages of information relating to debt management plans and the other alternatives available. Where visitors decide to seek advice the website advice team contains four professionally qualified debt advisers who will be able to work with you to establish a solution which fits your needs and circumstances.
