If debt management services are correctly administered, they are a necessary and very useful service for people with serious debt problems.

However, not every fee charging debt Management Company is correctly administered. Some companies may have high principles, poor I.T. and administrative systems means they deliver poor service. There are also a small number of companies that are inefficient and blacken the industry as a result.

The first Debt Management Companies in the UK based their debt help programmes on a combination of the formats used by the Citizens Advice Bureau and the County Court’s debt procedures.

Fee charging debt management companies do not try to act similarly to free debt advice companies and sometimes a free debt management service may be better in individual circumstances.

Most debt management companies operate on the basis of helping people who are experiencing debt problems to consolidate their debts into one affordable monthly payment without further borrowing. For the majority of people with debt problems additional borrowing to repay debt is simply not an option available to them anymore because of missed payments and therefore poor credit ratings.

Most fee charging debt management companies try to establish a potential client’s suitability for debt management by completing an income and expenditure report in order to establish a more accurate calculation of month spending patterns and disposable income.

A fact find like an income and expenditure report will demonstrate a client’s total income, essential expenditure deducted from income leaving disposable income. If there is a significant shortfall between the monthly contractual payments the client should make to repay debts, and the disposable income available, a debt management plan or service may be of help.