Debt Management

What is Debt Management?

Debt management is a debt solution that consolidates debt in to one affordable payment without the need for further borrowing.

You make one affordable payment to the debt management company, who distributes it between your creditors. The level of the reduced payments depends upon individual circumstances.

How debt management works

The debt management company (us) takes a financial statement from you detailing your income and all necessary outgoings, included your credit repayments. If this shows contractual repayments exceed your disposable income, the debt management company uses this as evidence to your creditors that you can't afford such payment levels.

This works as under the 1974 consumer credit act, unsecured creditors can't ask you for more than your disposable income once reasonable essential living expenses have been taken into account.

Qualifying for a debt management plan

You will be eligible for a debt management plan / programme if you have at least 3 different creditors, can't afford current contractual repayments, but can afford at a minimum of £100 per month towards your debts.

Why Use Abacus Debt Management

Abacus advises on the full range of debt solutions, not just debt management. Therefore you can be assured that we will only recommend debt management if is the most appropriate solution for you. If your situation is best suited to an IVA, remortgage, debt consolidation loan, debt management plan or even just better budgeting, we will advise accordingly.

Debt Management Case Study

Debt: £36,500, Old Payments: £703, New Payments: £200
Client's difficulties began when he became ill. After 3 months his wages were reduced to statutory sick pay. The strain of the illness and financial difficulty resulted in the Client X and his partner separating, thus increasing his living costs. The Client continued to live on credit and fell further into debt. Now he has recovered from illness and is returning to work.

His lengthy absence from work means an IVA is currently not possible. This is because creditors need to be confident IVA can be made every month for 5 years. He is to continue with current repayments and will consider the possibility of an IVA in the next 6-12 months.
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