Debt management – helping avoid repossession
Figures from the Council of Mortgage Lenders (CML) suggest that mortgagors around the UK are finding it harder to manage their debts. At the end of June 2008, 1.33% of mortgages were at least three months in arrears; three months later, this figure had risen to 1.44%.Figures for the final three months of 2008 aren't available yet, but the basic fact is simple: people miss payments when they don't have enough money to pay all their bills. However, the ones they're missing aren't necessarily the ones that are causing trouble. Many people find they can't make their mortgage payments because payments to their unsecured debts are taking up too much of their income. This is something debt management can help with.
Debt management – making money available for secured debts
When someone enters a Financial Helpline debt management plan, we talk to their unsecured lenders, asking them to accept lower monthly payments, as well as freezing interest and / or waiving charges.
Basically, we tell them how much our client can afford to pay them per month once they've taken into account what they need for their unavoidable expenses, from mortgage payments to food and utility bills. Lenders will normally understand that mortgage payments must take priority over (for example) credit card payments: most would rather accept lower payments for a while than see the borrower lose their home.
Debt management – negotiating with secured lenders
When the situation calls for it, our debt management experts will also talk to secured lenders. If one of our debt management clients is facing mortgage arrears, for example, we can talk to their mortgage provider and try to find a solution that suits both sides – a repayment plan that'll help the borrower pay off the arrears at a realistic, affordable rate.
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