29th May '08 - A Clamour for Debt Management Advice
The number of people seeking debt management advice is beginning to overwhelm agencies providing it and the pleas for help are coming from across a widening socio-economic spectrum.
This is the message from a national forum, Transact, whose members include more than a thousand organisations involved in the provision of debt advice. The profile of the typical “client” is no longer limited to the stereotypical, benefits-claiming individual living in social housing, but increasingly includes members of the hitherto affluent middle class. The number of enquiries currently being received is enough to force many of the voluntary agencies to close their doors to any further case-load.
Reports such as this tend to underline the fact that an apparently fairly straight forward process such as debt management can prove more difficult than first imagined.
Although debt management is something that practically everyone does when they are budgeting income against expenditure, it takes on a particular meaning when there are creditors involved who need convincing that debts can and will be repaid. A debt management plan, therefore, can be a very useful way of convincing creditors that you have both the intention and the wherewithal to meet your debts. In its barest essentials, a debt management plan simply presents your sources of income against your known, committed and essential expenditure. It should show, therefore, that there is a positive balance between the two that allows for the repayment of any outstanding debt. Although that might appear to be very simple and straight forward, it can actually prove more difficult to convince creditors that the figures stack up and that your best of intentions will eventually lead to the repayment of all your debts.
That is a very good reason for enlisting the help of professional debt advisors to draft and promote your debt management plan for you. Rightly or wrongly, it is also true that many creditors seem to find more convincing the debt management plan that is being advanced by a disinterested, professional third party than the debtor him or herself. There is a lot to be said, in other words, for turning to professional debt advice for help in drawing up and promoting your debt management plan.
The resulting debt management plan will need to discuss the ways in which you have previously attempted to tackle your debt. This might include debt consolidation, for example, where you have bought down high-interest borrowing to replace it with a single lower-interest loan. It might also compare the debt management plan to the likely results of an Individual Voluntary Arrangement, or IVA. In summary, agencies are currently snowed under with requests for debt management advice. Indeed, such is the caseload that many have had to close their doors to any new cases. Nevertheless, it can prove important to get the best possible professional advice on debt management because:
- This is the way of convincing your creditors that you are determined and have the means to repay your debts;
- The seemingly straight forward process of debt management planning can be made all the more convincing with the help of professional debt advice; and
- Debt management remains an effective way of regaining control over your personal finances.
The author of this article is John Smith.
This article does not represent ‘financial advice’ as each individual's personal requirements will be unique to their specific needs. If there is something in the article which you wish to rely on, please check those details with the person with whom you arrange financial services such as IVAs, loans or debt management plans.
The views in this article represent those of the author and not those of Netbasic Limited.
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