A Debt Management Plan is an agreement between you and your creditors to pay all of your debts.
Debt management plans are usually used when either:
You can arrange a plan with your creditors yourself or through a a licensed debt management company for a fee. If you arrange this with a company:
Money Helper has information on organisations that cangive you free advice about whether a Debt Management Plan is right for you.
Set up a plan with a debt management company authorised by the Financial Conduct Authority (FCA). Find an authorised company.
The company works out your monthly payments. You’ll have to give details about your financial situation, eg your assets, debts, income and creditors.
The company contacts your creditors and asks them to agree to the plan (they don’t have to).
Unless stated in the agreement, your creditors can still:
Some companies will charge:
Make sure you understand the costs of your plan and how you pay for it.
Debt Management Plans can only be used to pay ‘unsecured’ debts, eg debts that haven’t been guaranteed against your property.
Your plan can be cancelled if you don’t keep up your repayments.
An Individual Voluntary Arrangement (IVA) is an agreement with your creditors to pay all or part of your debts. You agree to make regular payments to an insolvency practitioner, who will divide this money between your creditors.Read More
Debt Relief Orders (DROs) are one way to deal with your debts if you owe less than £30,000, don’t have much spare income and don’t own your home. You get a DRO from the official receiver, an officer of the bankruptcy court...Read More