Debt management is a priority for those who have accumulated a mountain of debts. People are generally unable to deal too many creditors, which is why a free debt management plan can be helpful to get rid of the debt conveniently. Creditors would be more than pleased to get back their money in installments than not.
For preparing a debt management plan, financial situation of the debtor needs to be analyzed. This analysis includes careful consideration of different sources of income to the debtor and the expenses as well. The total monthly income and the total monthly expenses when calculated, give a clear idea of how much money is left with the debt after paying for primary needs. The difference between the monthly income and expenses is the monthly disposable income. This factor is considered in debt management program.
Creditors generally expect the total monthly disposable income to be repaid by the debtor. However, there may be other expenses that the debtor has to pay for every month and hence once the financial condition of the debtor is ascertained, a repayment schedule is worked out with the consent of the debtor. When this schedule is formed, the total monthly repayment is equally divided among all the creditors.
For instance, let us consider that the debtor has a total of $1000 as his monthly disposable income and there are 10 creditors. Thus, each creditor will get $100 every month. This is carried out till the time the entire debt is paid off.
There are some debt management agencies that can help you negotiate the deal with creditors. These agencies will prepare a plan and get it approved from the creditor on your behalf. However, you still have the option to directly talk to the creditor and formulate a plan for the repayment of debts.