How Debt Management and Debt Settlement can help you through the Recession

Debt Management is a wide spread concept, whereby consumers who have difficulty repaying their unsecured debt, are able to structure their repayments in an affordable manner, based on an assessment of their financial status. Once an assessment has been taken, the Debt Management company then works on the consumer’s behalf, to reduce their interest and repayments to a suitable level that satisfies both the consumer and their creditors.

With the current economic downturn, i.e. the ‘Credit Crunch’, rising fuel and utility prices, rising food bills and unemployment on the rise, the basic costs of living are becoming unaffordable for most households. Debt Management is taking the forefront to help those consumers worst affected. While there is a certain stigma attached to being involved in a Debt Management Plan, with the common mis-conception being that Debt Management companies work for the creditors, most Debt Management Companies actually benefit their clients. Despite taking management fees, a Debt Management Plan can actually prove cheaper and more cost effective than trying to tackle your debts by yourself, due to the expert knowledge these companies have in consumer financial management. Debt Connect invest heavily in ensuring their advisors are experts in consumer finance, and their debt advice and counselling service is first-rate.

When a consumer is under the stress of struggling to keep up repayments and deal with multiple creditors, it is often the case that they ‘bury their head in the sand’. This approach has a serious negative impact on their financial situation, due to rising interest and charges, and it also increases the likelihood of creditors taking legal action and getting bailiffs involved. If a consumer has avoided their debts, the best course of action is to get professional advice as quickly as possible, and to give the debts to a Debt Management company to resolve on their behalf.

Debt Settlement is a concept first introduced to the UK by Debt Connect. It involves client’s raising a lump sum, with which Debt Connect uses to approach and settle the client’s debts with their creditors. Due to expertise gained over the last 5 years, Debt Connect is now averaging a 40% settlement across all unsecured debt, saving their clients on average 60% of their outstanding debt. The settlement concept works well, as it appeases both the consumers and the creditors; the consumers are able to alleviate the burden of their debts, and relieve the stress they have been under in trying to repay their debts, while the creditors are able to gain much needed funds, which otherwise they would struggle to obtain. They are also able to reduce their costs, as the necessity to employ large arrears teams are reduced.

Debt Management and Debt Settlement are now mainstream financial products, and it is becoming increasingly important that consumers take advantage of the professional advice available to resolve their financial difficulties as quickly as possible. Debt Connect continues to be at the forefront of delivering high quality advice and counselling to those requiring financial aid, and due to the state of the economy, this number is rising rapidly.

For more information with regards to these subjects, please visit www.debtconnect.com