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How Debt Management Services Can Help You

Are your debts getting blown out of proportion? Are they becoming constant sources of tension and harassment for you? You can not afford to live life in this way. You need to take the help of a debt management service in order to settle your problems permanently.

These services are excellent in providing services to people who are in tremendous financial difficulties and who feel challenged each and every moment in their lives. If you are really dead serious about relieving yourself of debts, then you need to avail their services.

They function by lowering rate of interest and make it easier to pay with credit cards. At the end of the day, they aid in reducing the balance. These services and programs are perfect for individuals who are unable to pay their minimum monthly payments every month. The programs and services aim to lower the amount total of debt as well as consolidating the debt to an amount that can be repaid for the individual.

These programs are managed and handled through creditors. The credit cards held by banks are actually responsible for determining the rates of interests and payoffs. There will be no opinion of clients in these agreements. 

Terms and conditions of each bank for the debt management services are specific and can not be negotiated. The debt management services have to operate according to these conditions.

What is IVA Or Debt Management Program?

When a person in financial difficulties wants to avoid bankruptcy, they generally have two options. They can take either, an informal debt management program, or the formal IVA route. Here is a comparison of the two choices:

You can choose to use the informal route:

A debtor speaking directly to creditors, explaining that they are unable to continue their monthly payments at the agreed level and asking for a reduction in their repayments. Direct contact with creditors will help you save money on management fees for a commercial debt management firm, but you will still have to solve the problem. 

A debtor can use the services of a company that manages debts. They will then contact creditors on their behalf and negotiate lower monthly payments for them. A debtor who uses the services of a commercial management company for their debt will have to pay management fees every month. This will reduce the amount that can be paid to creditors.

  • These informal agreements play a part in the market for debt solutions. The decision on which option is best will depend on the particular circumstances of each case.
  • There are other issues you should consider when negotiating informal debt management agreements:
  • The debtor must repay the entire amount.
  • The interest on outstanding debt may not be frozen by creditors
  • Creditors can still bring legal action to recover the debt.
  • Once the debtor has entered the informal arrangement, default notices will be sent to the debtor.
  • An IVA will take you to the formal route.