A debt management plan offers a realistic and affordable way for people who are in debt to become free of their debt. Obviously because you will be paying a reduced monthly amount the time it will take to become debt free will be extended. As part of the initial consultation with a debt management company they will ask relevant questions about your monthly income and expenditures, to ensure that you have the means to make the repayments and still have sufficient money to live a healthy lifestyle. It is therefore imperative that you are as open and honest with them as possible and can realistically afford to make the agreed payments. The amount of time over which you have a debt management plan will be calculated using all the evidence you provide.

It is not unheard of for creditors to make claims that they will refuse to deal with debt management companies, however, a creditor cannot refuse to take payments from a debt management company and then try to take you to court for non-payments of the debt. Some creditors would prefer not to deal with debt management companies so that they can apply more direct pressure on you to pay but you have a legal right to chose who you like to deal with your finances.

Other creditors apply pressure on debtors by using threatening tactics such as saying they will send a bailiff round to collect their money, but unless a bailiff has been instructed and sent by the Sheriffs office or a County Court, the creditor has no legal right to send a bailiff to harass the debtor or indeed go to their house and demand money. A debt collector hired or working for the creditor may also try and threaten and trick the debtor by saying that they will ‘send the bailiffs round' but they also have no legal right to do so.

As all creditors have a right to be treated fairly and equally it is not possible to keep a credit card for ‘emergencies' due to the fact that if the other creditors find out that you are treating another company more favorably than them they may well reject any offers made to them and will most likely look to collect their money through court action. That is one of the reasons that many people are advised to cut up their credit cards and store cards until their debts have been fully repaid.

Once you have defaulted on payments to creditors you are breaking the terms of the repayments with them and therefore this may have an unfavorable effect on your credit rating, likewise entering into a debt management plan will also mean that you are breaking the initial agreement with the lenders and this will also have an effect on your credit ratings.

A debt management company will not lend money nor will they pay off your debts, the Debt Management Plan is a solution for you to pay off your debts at a monthly rate which you can afford and if you do not make payments into the plan the debt management company will not make payments to your creditors. Since there is no money lent by the debt management company they will not have the need to credit check you before you are accepted, they will however ensure that you have a surplus of money each month above what you need to live on to ensure that you have the means to make the payments on a regular monthly basis.