Debt management involves an informal arrangement that avoids the need for formal insolvency procedures such as an IVA or bankruptcy.
By reaching agreement with your creditors this may suspend action against you such as CCJs.
Your monthly debt repayments may be reduced.
Disadvantages of Debt Management Plans
The arrangements are informal so your creditors can change their mind at any time.
Your credit rating may still be harmed.
While such arrangements reduce your monthly repayments to make them affordable it usually means you are paying more in total over a much longer period.
Interest will usually continue to be charged on your debts particularly on your arrears which may be charged at higher rates than your original loan rate.
Unless your debts are less serious you could end up in debt for a very long time. In the worst case you may find you have no real prospect of getting out of debt and becoming debt free.
