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Debt Management - One Monthly Payment


If you want to reduce your regular repayments and have some money to spend each month, then a Debt Management plan may be your best option. If you are genuinely struggling to meet your current monthly commitments, we can negotiate reductions in your repayments to your creditors.


Contact us now. A five minute chat with one of our friendly advisors could change your life for good.

Debt Management
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Smooth Financial

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About Debt Management Plans

Smooth Financial negotiate with your creditors and manage your payments to them. The arrangement we negotiate for you with your creditors is called a debt management plan (DMP).

Your creditors will want details of your assets, including your home, if you own it. This helps them decide whether the offer you make through Smooth Financial is reasonable or whether they expect any of your assets to be sold so that they get a larger payment.

Depending on how much you owe and what you can pay each month or quarter, we will give you an estimate of how long the plan will last, we also review the plan every 6 months.


An Example of a Clients Debt Management Plan

Mr Brown was struggling to pay his debts and have a reasonable lifestyle. He owed a total of £17,900 to 6 creditors. Monthly repayments added up to a punishing £480 per month, of which £220 was to interest. Due to changes in circumstance, Mr Brown could not maintain his monthly repayments and with added interest and charges the total debt level was increasing month by month.


A management plan was put in place for an affordable amount of £250 per month. Interest was frozen on the account so that the repayment period was only extended by 2 months despite the lower repayment. This has given Mr Brown the standard of living he needs and an extra £230 per month to cover the priorities in life.


*This is an example and is subject to personal circumstances

Pros
  • Your monthly payments are based upon your affordability.
  • Interest payments applied by your creditors will, in many cases, be frozen.
  • The debt management plan is a flexible solution, meaning that if your circumstances change during the plans duration we will review the monthly repayment.
  • A debt management plan is an informal arrangement, meaning that it can avoid the need for a formal insolvency solution like an IVA or Bankruptcy.
  • Correspondence from your creditors will be dealt with by us.
Cons
  • If creditors don’t agree to freeze charges and interest, it may extend the repayment period of your debts as your monthly payment will be reduced in line with your affordability. This could result in you paying more in total over a longer period.
  • Your credit rating may still be affected and default notices registered against you.
  • Creditors may still continue with or commence legal action.
  • There is no guarantee the creditors will accept the arrangements.
  • You may further/or go into arrears with your creditors if payment arrangements are not met.




Real life example of Debt Management


Credit card A £2,500
Credit card B £1,000
Store card A £1,000
Store card B £500
Total owed: £5,000
Monthly Repayment £186

After a debt management plan

New Monthly Repayment £96

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