Learn about Debt Management Plans

What are the disadvantages of a Debt Management Plan?

There are some disadvantages associated with Debt Management Plans that you should be aware of:

• A Debt Management Plan can affect your credit rating in the medium to long term.
• Repaying your debt over a longer period of time may increase the amount you have to pay back.
• There are often fees attached to a debt management plan which the debt management company charges to manage your plan.
• The debt management companies will often only manage your non-priority debts such as credit cards, unsecured credit and store credits. Debts such as rent or your utility bills will still have to be managed by yourself. Your debt management company will ensure that your monthly budget always accounts for your previous bills.

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