In 2011, MDC, or Money, Debt and Credit, the financial service company, helped thousands clients in the UK with their personal finances. Their latest Infographic illustrates the average amount of debt that people have in the UK, based on the data from MDC’s bespoke service of Financial Management Plans. This revealed that the typical amount of debt for their clients is between £6001-9000.
This information has been categorised using national, regional and London postcodes. If you are struggling financially, the first thing you need to decide is if a Financial Management Plan is right for you. If you are having difficulty paying bills, or have had a major change in your household income, or unable to keep up with financial commitments, then the best way forward maybe a Financial Management Plan .
Your first step is to calculate how much a month you can afford to pay towards your debts, after you met your essential commitments. A payment plan is then devised for you that is fair to both you and your creditors. These payments are then negotiated on your behalf so your original monthly repayments are restructured to accommodate the changes.
We also try to get interest and charges frozen on all your debts so that more of what you pay goes towards reducing the debt (in many cases we are successful, but there’s no guarantee this will be accepted every time).
Then it’s simply a case of maintaining one monthly payment to us, which we distribute to all your creditors, either until your circumstances improve or your debts are cleared. A Financial Management Plan is an informal arrangement between you and your creditors and has the flexibility to be adapted to suit your needs if your circumstances change.
Although a Financial Management Plan could be the perfect solution to get your finances back on track you should also consider the following points before deciding to go ahead:
•They are not legally binding so creditors are still free to take legal proceedings against you at any time.
•Reducing the amount you pay means you will be repaying your debts over a longer period of time and may increase the total amount to be repaid
•Your ability to obtain credit will be affected in the short term, and possibly in the medium to long term.
•You are still liable for paying your debts in full.