Debt Management Plans

A Debt Management Plan is an arrangement where debt management company negotiates with your creditors on your behalf to change your debt repayment terms to reduce your outgoings to an affordable level. Debt Management Plans (DMPs) can be very useful, especially if your problems are likely to be short term. Also, creditors often expect you to try debt management in the first instance before being considered for an IVA as they are much quicker and smipler to arrange and can demonstrate a track record of ability and willingness to maintain the payments.

Debt management companies will usually expect you to pay them as much as you can afford after taking into account your reasonable living costs. They will negotiate with your creditors to accept reduced repayments and/or freeze interest charges. Commercial Debt Management companies are highly experienced in this process and maintain good relations with the creditors they negotiate with and so are often able to acheive as good if not better results than debt management charities.

Your payments in a Debt Management Plan are forwarded to your creditors less the initial and, then, monthly fee. This is usually around 15%-18%. You can find out more about the advantages & disadvantages of Debt Management Plans here.

Taking the two-minute Debt Analyser test now will give you a personalised initial assessment of whether a debt management plan could be right for you!