The number of people struggling with debt is increasing with rising inflation and financial pressure. People might make both ends meet, but in reality, they are still in debt and struggling to keep their heads above the water. To assist those struggling with their finances, the ‘debt management plan’ (DMP) was created as a possible solution.
Debt management companies sit behind a debt management plan. They will help you structure and initiate a DMP.
In this article, we will provide information about the best debt management companies UK. You will know how they work and to which extent they are beneficial to get you out of debt. The sooner you manage your debt, the easier it is to get out of it. You can get step-by-step help for debt management using our guide.
How do debt management companies work
To work efficiently, debt management companies implement the following step-by-step procedure:
Step 1: Assessing your financial situation
The first step while managing debt is to assess your financial situation. Debt management companies (UK) will take all your previous financial records and analyse your history. It might be a small step, but it is an essential one. Being as honest as possible is essential to get the most out of this process.
To understand if you are in a debt crisis, the first thing to investigate is whether you struggle or not while paying all basic outgoings. For example, are you stressed while paying mortgage bills, rent, or energy bills? Debt management companies (UK) also recognise if your total income amount after paying all taxes is less than your debts. If both conditions apply, then a debt management plan could be the right solution for you.
Step 2: Creation of a tailored budget
The next step is to create a custom budget based on your financial situation. Companies usually advise cutting back luxury expenditures and having pain-free savings. For this purpose, the best debt management companies UK will:
- Sort your expenditure
- Create a custom budget
- Minimise spending
- Cut costs like unnecessary monthly subscriptions
Step 3: Assert your right to everything that you are eligible for.
You may be paying multiple fees which are made up of charges or interests that can be reclaimed. For example, potential cash injectors such as working-from-home tax rebates, uniform costs refunds and council tax band reviews.
If you figure out which fees you are not required to pay, or ones which you can claim back. You can put all that extra money back into the budgeting pot!
Step 4: Devising a repayment plan
The next step is to find a suitable repayment plan. For this purpose, the best debt management companies (UK) ensure you repay the debt as soon as possible with the lowest interest rate.
Your debt management company will negotiate with your creditors and settle a repayment plan. The repayment plan includes guaranteeing on your behalf that you will pay each month regularly with little delay.
Step 5: Start repayment
After devising a repayment plan, the debt management companies will take you through the repayment step. They’ll make sure that creditors do not include any unnecessary obligations. They also keep an eye on your spending to make sure you’re not overspending. This will help you to strictly follow the repayment plan and get out of debt sooner.
Best debt management companies UK
The best debt management companies in the UK will help you get rid of debt. They will assist you with the above steps.
You can get your fully tailored debt advice in the UK with Citizen Advice.
They have specialised caseworkers that will help you to manage any debt. Their further services include assisting in repossessions and negotiating with creditors.
StepChange Debt Charity
The standout feature of StepChange Debt Charity is its debt advice tool. It helps you to create a suitable financial plan. With the help of this customised action plan, you can improve your financial situation sooner and easily!
Their free debt help UK advisor will answer all your queries.
National Debtline is one of the suitable options in the UK. They provide free resources and help to deal with all sorts of debts. You can assess the help via phone, online, and web chat.
Other available options
Other options available in the UK are Christian Against Poverty, Civil Legal Advice, Debt Advice Foundation, Business Debtline, and PayPlan.
Christians Against Poverty help in debt by supporting people emotionally. Critical financial situations are overwhelming, so they assist in managing debts by focusing religiously on why they do it, not how they do it.
Civil Legal Advice covers a relatively small range of financial issues. They help when your assets are at risk.
Debt Advice Foundation offers an education charity that provides one-to-one advice.
Business Debtline gives resources and helps with all personal and business-related queries without cost.
PayPlan is a private company that gives free debt advice and solutions to people who are in need.
Finding a reliable debt management company is crucial in regaining financial stability. In the UK, you will find various reliable debt management companies. But make sure to analyse their pros and cons before deciding on one. Do your research, read relevant reviews and start your journey towards a debt-free future with the best debt management companies (UK)!