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Debt Management Plan

What is a Debt Management Plan?

A Debt Management Plan is an informal arrangement between you and your creditors where you agree to make just 1 affordable payment every month towards all of your debts. It is managed by a Debt Management company who will be responsible for all correspondence between you and your creditors.

How long does a Debt Management Plan last?

A Debt Management Plan lasts as long as you need it to. You usually continue your payments until your debts are paid in full, but you can opt out at any time, should you wish or if your financial circumstances change.

A Debt Management Plan can be a good way of reorganising your finances if your are having difficulty with debts.

Debt Management Advantages

  • It is an Informal agreement that can be stopped at any time as your circumstances change (for better or worse).
  • Interest & Charges could be frozen if creditors agree.
  • Creditor pressure is eased as they deal with us.
  • You will have 1 easy monthly payment to cover all unsecured debts.
  • We negotiate with creditors on your behalf, so offers are more likely to be accepted and interest frozen than if you try to do this yourself.
  • We help you prepare your plan and payment taking into account your household and personal spending.

Debt Management Disadvantages

  • It can remain on your credit file for sometime after completion if a default notice has been issued.
  • If your creditors refuse to freeze or reduce interest this can lead to increased debt level as repayments are less than original contractual payments. Any further collection actions may incur costs that will normally be added to the debt.
  • Debts will be repaid over a longer period of time than if contractual payments were made.
  • You will repay debts until they are paid in full.
  • Repaying debt over a longer period may increase the total amount to be repaid.
  • Your ability to obtain credit will be affected in the short term and might be affected in the medium to long term.

Do you need help with your debts?

We are one of the leading Insolvency firms in the UK and have been in the financial industry since 1932. We solely provide IVAs and other Insolvency solutions. We do not offer informal debt solutions such as a Debt Management Plan, so if an insolvency solution is not your recommended course of action, with your permission, we will refer you to an appropriate agency/provider that can assist you further.

Remember all our advice is free so don't hesitate to contact us now!

If you would like to ask us any questions about about your debts call us on 0800 043 3328 or fill out the form on this page and we will be happy to advise you.

For more information on Debt Management Plans you can read our Debt Management FAQs.

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IVA Example

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A couple were jointly paying creditors over £700 per month. We were able to have this payment reduced to £300 per month, with all interest and charges frozen. After 8 months of paying this reduced sum, they proposed to remortgage their home. This was successful and they released £19,000. Their creditors accepted this as a full and final settlement of their debts.

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