2020 Guide to Debt Management Plan

debt-management-plan

The history of debt financing is as old as mankind itself. Every enterprise that seeks expansion and every individual who requires external finances has to go through the hurdles of debt financing system. While the procedures of acquiring and utilizing debts have changed over the years, the management plans have also evolved to encapsulate the demands of an evolving marketplace. DMP, also known as the Debt management plan, was originally a County Court order initiated for borrowers to help repay debts. This was specifically designed for borrowers who were unable to manage the repayments of principal amount as well as accrued interest. In this scenario, the finance or loan groups that had bequeathed the loan, sought to retrieve it, hey would contact the courts. The Court would then deem the borrower’s monetary position insufficient to repay the debt amount. The procedure would dictate that they take into account all the outstanding debt and normal financial commitments to formulate a manageable amount and tenure to reimburse all debts. This was drawn up after considering the fact that borrower still manage to pay on-going responsibilities including rent, utilities, food and vital bills required to live and compensating for those obligations.

What does the Debt Management Company do?

Debt Management Company is the entity which makes debt management plan of how you can repay a debt. The specialty of many DMCs is large amounts of debt that are consuming most of the borrower’s budget and are extremely hard to pay back. Whenever presented with a case, the DMCs perform the following steps:

  1. List down of all the creditors & calculate outstanding debt.
  2. Complete reports of incomings & outgoings cash flow per month.
  3. Ascertain disposable income /pro rata among creditors. Pro rata means that every creditor gets an equal proportion of amount owed.
  4. Final stage is forming up the DMP and requesting them to freeze interest so the plan goes as planned.

Where Does Solution2Debts come in?

While many companies provide substantial debt management plans, there is an evident lack of personalization and creditor-satisfaction. Every borrower needs a company that understands just how precarious this situation is and deals with it delicately. Solutions2Debts is the iva platform that checks all these boxes easily and successfully. Solution2Debts is responsible from Step 1 to Step 4 for the convenience of consumers. It understands the importance of an effective plan for its customers because a debt free life is a blessing. Financial freedom is what it takes to have a good standard of life without getting pinged by creditors at your back. Solution2Debts provides that and so much more. Every consumer is provided a customized and personalized plan with heavy interpersonal interaction during the whole process.

How the plan will work?

Solution2Debts has a simple way of making its plans work perfectly. You will be provided with the details of following topics:

  • The overall cost of the plan every month
  • The total cost you’ll repay over the entire time period
  • How long you will be paying the plan till you have repaid all of your debt
  • How much the total cost will be
  • What amount will you pay to the iva debt management company

In most cases, if the employer remains in negotiations with any of your lenders, then they have to make sure that any proposed figures are estimates before entering the final contract.

This is how iva and Solution2Debts work productively for the betterment of the customers. Subscribe and follow us to learn more about effective debt repayment and how much Solution2Debt helps the borrowers in your community.