Debt management companies

Debt management companies offer the services of professional debt managers that can negotiate with your creditors on your behalf in order to arrange for you a more suitable payment schedule, with reduced monthly repayments. They do this by presenting a statement of your finances that confirms your repayment capacity.

Your essential expenses (i.e. rent or mortgage repayments, car loans, household expenses) are taken into account and the remainder is allocated and distributed between your creditors. This type of repayment plan is not legally binding so your creditors may opt to back out at any time. However as long as your end of the deal is consistently met, lenders will often comply to the agreement and save themselves the expense of bringing your debt to court and risk appearing prejudiced for harassing you despite your clear efforts to settle what you owe them.

The debt management company will send you regular statements so you can make sure that payments are being kept on track.