Debt Management Planning: Tips to Deal with Your Debts

A debt management plan can be defined as a repayment scheme which helps in making unsecured debt repayment more reasonable and inexpensive.

A debt management plan is generally managed by a third-party provider like a debt management company to reduce your monthly payments towards the debt. The convenience of the debt management plan lies in the fact that you have to pay only a single amount to your debt management provider and then they will manage all your creditors by sharing your payment every month.

This article aims to provide you with some important guidelines to manage your debt much more efficiently.

The three main pillars of a debt management system are:

  1. Debt counselling

Debt counselling introduced by the National Credit Act (NCA) is a formal legal process that offers its customers all the required assistance to deal with your debt related issues. The important features of debt counselling are discussed below:

  1. Debt counselling is one of the best debt management means that helps the indebted clients struggling with their debts to manage their debt through proper budget advice and negotiation with their credit providers.
  2. Many debt management companies totally guide you by providing proper legal protection to you

iii. Debt counselling is governed by the National Credit Act and is overseen by the National Credit Regulator (NCR)

  1. Debt reviews

Debt review is the process where a debt counsellor assists the clients by providing them proper debt assessment and also implements a restructured debt repayment plan. The features of the debt review are discussed below:

  1. It is a process that includes renegotiating interest rates with the credit providers in an attempt to reduce the rates.
  2. They also plan new budget-friendly payment plans that help you in providing correct guidelines regarding the management of your debts.

iii. Under debt review, a client gets legal protection from the National Credit Act (NCA).

  1. Debtconsolidation

Debt consolidation is the combination of quite a few unsecured debts like credit cards, medical bills, personal loans etc. The features of debt consolidation are discussed below:

  1. The most useful measurement of debt management plans is debt consolidation
  2. Consolidating debts help you to pay all your debts at one time.

iii. A consolidated credit card debt helps you by providing you the ability to pay using cash. This actually assists you in saving a certain portion of your monthly income for paying debts.

However, some other important factors of debt management plans are:

A debt management plan can easily be fitted in your budget with other utility expenses like food, accommodation etc. You just need to pay a single amount which will be divided amongst those you owe money.

In conclusion, it can be said that a suitable debt management plan can save you from your anxiety and fear regarding debt issues. Managing debt is key to a successful payment plan but for your debt management plan, you must seek help from skilled professionals who can provide you proper guidelines and strategies for your debt management.

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