Debt Management Plans, Debt Management calculators, Debt Management Program, Debt Management Software

Debt management

A debt management plan entails a series of steps, which the third party service works on with the help of the debtor. The first step typically involves compiling a list of all creditors and the amounts owed to each. Some creditors are not eligible to be included in a debt management plan, and typically, secured debt such as car loans and home loans are not included.
Once a list of creditors is compiled and the amount of debt is totaled, the debtor’s total income and expenditures, such as mortgage or rent payments, car payments, cost of living expenses, and so forth, are totaled as well. The third party agency assisting with the debt management plan then helps the debtor to determine the maximum amount of money available to allocate to the plan for debt repayment. In many cases, a third party service will attempt to settle some debt amounts and exclude or lower any interest charged during the repayment period. However, it’s important to understand that participating in a debt management plan will still impact your credit score, and that any available credit may be inaccessible for a period of time. Further, if you have less than 10,000 US dollars of debt, you may not qualify for a third party service.

Debt management, by the standard financial definition, involves a designated third party assisting a debtor with repayment of his or her debt. Many companies specializing in credit counseling offer debt management plans to help people with heavy debt and damaged credit get their financial situation under control. A simpler definition of debt management could be the routine practice of spending less than one earns. However, for all intents and purposes, debt management is a structured repayment plan set up by a designated third party, either as a result of a court order or as a result of personal initiation.

Benefits of debt management :

	You pay only what you can afford
	Tailor-made to suit you
	We deal with your creditors
	We aim to freeze or reduce interest and charges
	One single point of contact
	A note about debt management

Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.Debt consolidation can simply be from a number of unsecured loans into another unsecured loan, but more often it involves a secured loan against an asset that serves as collateral, most commonly a house. In this case, a mortgage is secured against the house. The collateralization of the loan allows a lower interest rate than without it, because by collateralizing, the asset owner agrees to allow the forced sale of the asset to pay back the loan. The risk to the lender is reduced so the interest rate offered is lower.
Sometimes, debt consolidation companies can discount the amount of the loan. When the debtor is in danger of bankruptcy, the debt consolidator will buy the loan at a discount. A prudent debtor can shop around for consolidators who will pass along some of the savings. Consolidation can affect the ability of the debtor to discharge debts in bankruptcy, so the decision to consolidate must be weighed carefully.
Debt consolidation is often advisable in theory when someone is paying credit card debt. Credit cards can carry a much larger interest rate than even an unsecured loan from a bank. Debtors with property such as a home or car may get a lower rate through a secured loan using their property as collateral. Then the total interest and the total cash flow paid towards the debt is lower allowing the debt to be paid off sooner, incurring less interest.

Tax Payment

The Income Tax Act, 1961, as an individual, you have to pay advance tax if the total tax payable in the relevant financial year exceeds Rs 5,000. Apart from the regular sources of income, like salary, business/profession and other sources like interest, advance tax is also payable on non-regular income like capital gains.Advance tax has to be paid before the relevant financial year comes to an end. So, for the year 1 April 2001 to 31 March 2002, any amount that is paid before 31 March