What is Debt Management Plan?
A Debt Management Plan is a financial strategy or procedure undertaken by individual debtors – ranging from private to commercial in nature – in order to enact methodology fashion in order to rectify outstanding debt through repayment. Due to the varying nature of debts, the most effective Debt Management Plan associated with an individual debtor will typically be tailored to the individual debt of that individual – the structuring of a Debt Management Plan will factor the nature of the debt, the amount of the debt, the innate value of the outstanding loans, as well as any and all applicable interest rates associated with the debt or debts in possession of that debtor.
However, the structuring of a Debt Management Plan in only one of the many facets inherent with regard to administrative methods associated within debt management; the analysis and determination of the most beneficial plan of action suggested for the individual debtor or debtors is considered to be amongst the most crucial features of an individual Debt Management Plan
While a plan of action may allow an individual debtor to become eligible for gradual repayment schedules, another plan of action may require an individual to file for bankruptcy or the liquidation of assets
The filing for a bankruptcy claim may be the best debt management plan in the event that the individual debtor finds themselves unable to participate in – or gain eligibility for a sufficient repayment plan
Mortgage-Based Debt Management Plan
Within the realm of debt management and financial assessment concerning the terms and conditions of Debt Management Plan, the following legal and financial instruments are amongst the most commonly associated:
Mortgage-based Debt Management Plan
Mortgages are defined a secured loans furnished to individual applicants unable to provide the necessary funding required to purchase a property through the provision of a loan utilized to satisfy the valuation of the property itself; mortgages can range from residential to commercial in nature:
‘Mortgages’ are furnished by financial institutions specializing in the provision of mortgage loans for qualified borrowers, which are defined as individuals proving their eligibility for the receipt of such loans through the investigation of their respective financial and credit history
Yet, these types of secured loans may become secured debts in the event that the individual in possession of a mortgage fails to repay or satisfy the mortgage in question – the failure to satisfy mortgage loans may result in the repossession of the property relating to the outstanding mortgage
Student Loan Debt Management Plan
Student Debt results from financial loans borrowed by individual, prospective students; in the event than an individual wishes to participate in educational programs, yet is unable to satisfy the full payment upon the time of enrollment, specific loans – ranging from Federal to Private in nature – are furnished for expressed purposes of satisfying the required fees conditional to enrollment; however, due to the fact that student loans typically lack collateral backing, they are identified as unsecured in nature.