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Debt Management

Debt Management - (A)

Debt management refers to an informal agreement with unsecured creditors to pay off a debt over a period of time, usually by extending the time it takes to pay off the debt. As part of debt management, and SOA is offered to creditors. In this way, your disposable income, evaluated by the debt management company, will be offered to the creditors and they will decide whether or not to accept it.

After the agreement, you will have to pay periodic fees to the debt management company. These payments are then distributed among your creditors, making it easier for you to pay off your debts. Therefore, the fundamental goal of debt management is to help you settle your debts at a compact level over a set period of time, allowing you to start over with your finances.

Who can use debt management?

Debt management is an opportunity for those who:

  • are faced with a short-term cash flow problem and believe that their financial situation will change in the near future
  • unable or unwilling to take out additional credit or use the equity in their home
  • wants to get rid of creditor pressure
  • everyone wants to pay off their debts but is struggling with their current payment plan

Advantages and disadvantages of debt management


  • Debt management is flexible. This means that as circumstances change, the plan used for debt management can be modified accordingly.
  • Debt management reflects your responsible attitude towards your debts, which could be positively evaluated by potential creditors.
  • There is no contract with the debt management company that allows you to withdraw at any time and make alternative arrangements if you are not satisfied with the services.


  • Unless otherwise negotiated, there will be interest payments, so you will get a large amount at the end of your repayment period.
  • The terms of your loan agreements with creditors are violated.
  • Obtaining credit in the future could be expensive.



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