To appreciate how problems can occur, it's essential to understand exactly what a debt management plan is. This is especially important given the inflated claims made by a number of DMP providers in their marketing materials and telephone scripts.
A debt management plan is not established in legislation like options like an IVA or bankruptcy are. It therefore doesn't formally convey rights, responsibilities and restrictions on either the debtor or the creditors in the same way. Parties aren't bound to the debt management plan as they would be with the more formal options. With this extra flexibility comes a little uncertainty.
A DMP does not guarantee that creditors will freeze interest, stop charges or avoid legal action for example. It is basically an attempt to agree a series of reduced repayment offers with each individual creditor and a request that each creditor provides concessions, such as freezing interest for example. Many creditors will try to help people who have got into financial trouble and who are genuinely doing what they can to fix it.
Many people that provide DMP advice are highly motivated to get their clients signed up in order that they can earn financial incentives. This isn't the majority, most advisers are professional and motivated to help their client, but there undoubtedly are a significant number of DMP advisers who are prepared to say whatever it takes to get a sale. From this can develop a situation where clients believe that it's guaranteed that interest will stop, who have been told no legal action can happen, who haven't been told about the fees to operate the debt management plan or who weren't aware that other options existed.
Skewed and deliberately false or partial initial advice is the major source of future debt management plan problems. Do you know a lot about the various debt solutions? Amazingly, there are a lot of DMP advisers who do not. Frequently people are employed as advisers on the basis that it's a "sales" position and then work from scripts which have been given to them. It's pretty much the only financial sector in the UK where advice can be provided by an individual that has no qualification to do so.
Incompetent debt advice is as dangerous as advice provided by those seeking to sell you a debt management plan irrespective of suitability. Most debt management plan problems can be traced back to the three issues identified in this article. A failure for a client to realise the limitations of the arrangement they are entering into, a DMP adviser motivated by personal greed, or advice provided by an adviser who doesn't know what they're talking about can lead to wasted time, great expense and significant personal distress.
What can you do to protect yourself? The first step is to ignore the salespeople. If someone calls you out of the blue about a debt management plan don't carry on with the call; find a company you want to speak to. If an adviser isn't listening to you, or is putting pressure on you to commit or make a payment, find another adviser.
Insist on any adviser you speak with being professionally qualified. If they cannot provide you with details of their qualification for their role, please find someone who can. Finally please consult with a number of debt and debt management plan advice sources. Taking varied advice will help you to weigh up the advice you have been provided and increase the chances of making an appropriate decision.
The debt management forum enables you to secure quality information from debt management plan professionals at a number of well-known firms. The information resources on the site will also help you to compare the benefits of a debt management plan to the possible benefits of the alternatives.
A debt management plan is not established in legislation like options like an IVA or bankruptcy are. It therefore doesn't formally convey rights, responsibilities and restrictions on either the debtor or the creditors in the same way. Parties aren't bound to the debt management plan as they would be with the more formal options. With this extra flexibility comes a little uncertainty.
A DMP does not guarantee that creditors will freeze interest, stop charges or avoid legal action for example. It is basically an attempt to agree a series of reduced repayment offers with each individual creditor and a request that each creditor provides concessions, such as freezing interest for example. Many creditors will try to help people who have got into financial trouble and who are genuinely doing what they can to fix it.
Many people that provide DMP advice are highly motivated to get their clients signed up in order that they can earn financial incentives. This isn't the majority, most advisers are professional and motivated to help their client, but there undoubtedly are a significant number of DMP advisers who are prepared to say whatever it takes to get a sale. From this can develop a situation where clients believe that it's guaranteed that interest will stop, who have been told no legal action can happen, who haven't been told about the fees to operate the debt management plan or who weren't aware that other options existed.
Skewed and deliberately false or partial initial advice is the major source of future debt management plan problems. Do you know a lot about the various debt solutions? Amazingly, there are a lot of DMP advisers who do not. Frequently people are employed as advisers on the basis that it's a "sales" position and then work from scripts which have been given to them. It's pretty much the only financial sector in the UK where advice can be provided by an individual that has no qualification to do so.
Incompetent debt advice is as dangerous as advice provided by those seeking to sell you a debt management plan irrespective of suitability. Most debt management plan problems can be traced back to the three issues identified in this article. A failure for a client to realise the limitations of the arrangement they are entering into, a DMP adviser motivated by personal greed, or advice provided by an adviser who doesn't know what they're talking about can lead to wasted time, great expense and significant personal distress.
What can you do to protect yourself? The first step is to ignore the salespeople. If someone calls you out of the blue about a debt management plan don't carry on with the call; find a company you want to speak to. If an adviser isn't listening to you, or is putting pressure on you to commit or make a payment, find another adviser.
Insist on any adviser you speak with being professionally qualified. If they cannot provide you with details of their qualification for their role, please find someone who can. Finally please consult with a number of debt and debt management plan advice sources. Taking varied advice will help you to weigh up the advice you have been provided and increase the chances of making an appropriate decision.
The debt management forum enables you to secure quality information from debt management plan professionals at a number of well-known firms. The information resources on the site will also help you to compare the benefits of a debt management plan to the possible benefits of the alternatives.
1 comments:
Each and every plan have some problems.Its great information about debt management plan and problem. But its easily solve it. You have done great work.
Debt Collector
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