How Does Debt Management Affect Home Owners?

debt management

One of the concerns that homeowners face when they look at their debt problems and begin considering a debt management plan, is whether or not their home could be repossessed.

Having too much debt is stressful enough. The last thing a person needs to worry about is losing their home as well. If you are in debt and are considering a debt management plan, one of the best things you can do is to talk to Payplan for debt advice. An independent company like this will be able to advise you of the best steps to take for your situation.

Keep in mind that in general a debt management plan, or DMP, comes with very little risk to your home.

A DMP is an agreement made through an independent party where you pay off your debt by making a single affordable monthly payment. The amount you pay takes into account your earnings and expenses and will be an amount that you feel you will be able to afford every month until your debt is paid off.

Your debtors want their money back, and many of them will agree to these plans so that they will see a return.

If, for some reason, you can’t keep up with your monthly repayments your debtors could issue a default payment on your account. If, after this notice, you still miss payments your debtors can apply for a county court judgement.

Even after all of that is done your house would not be at risk unless you still missed payments on your plan and the debtors applied for a standing charge against your property.

It is, of course, advisable to contact a professional for advice before entering into any sort of DMP, but keep in mind that these plans are structured in such a way that you should not have any problem making the monthly payments.

Even if you can’t keep up with your repayment plan, the process for a debtor to be able to get your home is a long one.

A spokesperson for Payplan said: “Entering into a Debt Management Plan in itself will not put your home at risk, but missing mortgage repayments or other secured loan repayments can.

A good Debt Management Plan will prioritize all your secured debt repayments, and then allow you to make just one affordable debt repayment to your unsecured creditors on a regular basis, such as every month.

One benefit of being a Payplan client is that if you find your debt repayments are unaffordable there’s always someone here to help you, talk things through with, and then agree on a way to deal with the problem.  At the end of the day we want to help you get out of debt as quickly and smoothly as possible.”


Comments

    • krantcents

      krantcents 02/26/2013 6:29 p.m. #

      By the time you get to a debt management plan, things must be difficult. It is bad enough that you may need that kind of help, but you don't want to lose your home. I think most people need flexibility versus just tough love.

    • Michelle

      Michelle 02/26/2013 6:35 p.m. #

      Having too much debt would definitely be stressful. Having a house foreclosed would be a horrible feeling.

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