You will have noticed the volume of debts management programs and companies rising as the global recession bites. Essentially this is the time when these companies do their best business, helping customers unwind from some complex and often frightening financial positions. 

The term 'debt management' is the process of speaking with your creditors and finding mutual agreement on the best way forward, you reduce your monthly cost and they are paid back but over a longer term. If you are struggling with your monthly payments then it's in both parties best interest to find an amicable outcome. If you don't the creditors only choice is the costly and unwanted legal route to recover some or all of their monies.

Your creditors may well accept a reduced level of payment for a set period of time and in some cases, if done right, could put a stop on the escalating interest charges being applied. The key here is to talk with your creditors yourself or by using a specialist in this field to help you devise a plan. Choosing the latter option you'll see a wide array of providers in this field from charities to profitable organisations. 

Prepare in advance and be honest with yourself. Before speaking with anyone, make a note of each of your debts, the amount outstanding, monthly costs, remaining term, provider name and an accurate picture on any repayments you are behind with.

But be careful, the lender may give you a window of opportunity and some breathing space but can revert to the original terms. The result of this could mean court proceedings and an action by the lender to recover their debts quicker than you expected.

So, act quickly and do thorough research to make sure you are taking the right steps. Most professionals will rightly tell you that a solid long term solution is needed, not a quick fix.

Alternative debts management options to consider:

If you are still on top of your monthly payments and simply need to tidy up some debts, a consolidation loan may be the answer.  This could be secured or unsecured in nature but will mean extending the repayment terms of your debt, giving you the lower monthly repayment you are looking for. The drawback is that you'll pay back more in interest over the term of the debt.

If your financial position really is in meltdown then an IVA or bankruptcy may be the route to take. Seek professional advice and obtain an opinion from a few providers to make sure you are on the right track. The drawback of an IVA or bankruptcy is that it leaves a lasting impact on your credit report uk, for around 6 years, and means you will find it tricky to borrow money over that period. The benefit of having your debts in effect written off may justify this move.