Debt Relief from a Debt Management Plan

Debt Management Plans (DMPs) are much in news reports currently. A few unfavourable issues with the sector made the biggest headlines. Like any enterprise a handful of bad apples can give the barrel a bad name. In Britain the Office of Fair Trading (OFT) has recently taken actions to handle the bad apples. Essentially the most significant offences it has identified took place in the areas of marketing and charging behavior. In September 2010 it issued a warning to 129 debt management companies and followed that up with high profile enforcement actions against the worst offenders. The OFT plans to publish revised debt management direction in June 2011. It is not evident now whether or not the government plans to introduce any laws to control DMPs. Still the Ministry of Justice has circulated a consultation document relating to the way forward for DMPs. Three options for regulation are being offered. They are to marginally enhance regulation by the OFT, to introduce industry self regulation with voluntary codes of practice and/or to create a fresh solution i.e. a statutory DMP. Since the DMP is the predominant personal insolvency solution in the UK at the present time, it is perplexing that the government seems to shrink from the obligation of legislating in this area. So what is the current condition of national debt management advice and how can it give relief to debtors? Continue reading