Debt Management Plan

The heavy debt management plan is an agreement between you and these people who owe you money like IVA, DRO, not legally enforceable in perverse of bankruptcy.

Key features

In a debt management plan, you can negotiate lower payments in the long run, but it’s important to note that your transactions aren’t legally required to agree to your offer, collect interest, or delay any legal proceedings, and In some cases, you may increase over time due to interest accruing, so it is important to get the right advice on whether Debt Management Plan is appropriate for your situation. There are two main types of Debt Management Plans.

Fee Charging – Then you pay the operation figure. Most of the companies that charge between 10percent and 15percent of your monthly payment believe that they provide good service that justifies the separate cost.
 

Non-Fee Charging –  Then the full quantum of your monthly payment goes to pay off your loans as there are no monthly management fees to be paid, so if you use the company that charges your loans, pay off your loans as soon as possible.

Debt Advice Foundation never recommends a debt management plan that charges fees such as How long will the My Debt Management Program last. However, if you need advice on Debt Management Plans. There is no need to stop or make an appointment.

Advantages
  • You will be able to agree to a minimum monthly payment.
  • Some creditors will agree to collect interest.
  • Your home is not at risk if you keep making payments.
  • Friends, co-workers, and family do not need to know about it.
  • A debt management plan helps you to find your loan Or a debt management plan is similar to a government debt management plan like a step change.

Disadvantages

  • It is not legally bound.
  • Not all creditors agree to collect interest.
  • Loan payment time will increase (you should make sure you’re happy with it).
  • All creditors must separately agree with you.
  • Any fees you may add to your debt.
  • Debt Advice Foundation’s online Debt Management tool, Personal Debt Analyser, allows you to manage the process of negotiating reduced payments with your creditors yourself. However, before using online Debt Management to renegotiate with your creditors, we always recommend that you speak with a independent Advisor as there may be a more appropriate solution for your financial situation that will enable you to become debt free earlier. Where Debt Management is appropriate, Debt advice Foundation will only recommend a non-fee charging arrangement (see do all debt management companies charge fees). You can read more about Debt Management and whether it is suitable for your situation in our Debt Management section. Debt Advice Foundation is a registered UK charity offering free, confidential support and advice on any aspect of debt, including Debt Management. If you need to talk to someone about Debt Management or would like to discuss the alternatives, please call to speak to an adviser.

  • Whether a debt management solution is right for you depends on a number of important factors: How long will it take to pay off your debts in full under the revised terms? It’s a little more complicated than it might seem at first glance as Debt Management advisors will usually assume all of your creditors will agree to freeze interest. In reality, this is unlikely and you should be prepared for your plan to last longer than the initial estimates. Are your creditors likely to accept your proposal (some creditors are more cooperative than others)? Are there more appropriate solutions for your circumstances? If your Debt Management solution is estimated to last more than 7 years then the chances are that an IVA, Debt Relief Order or even Bankruptcy may be better solutions for you. You can read more about Debt Management and whether it is suitable for your situation in our Debt Management section. Debt Advice Foundation is a registered UK charity offering free, confidential support and advice on any aspect of debt, including Debt Management. If you need to talk to someone about Debt Management or would like to discuss the alternatives, please call to speak to an adviser.

  • There is actually no such thing as government Debt Management, although all Debt Management companies in the UK must be listed on the Financial Services Register as they are subject to regulation by the Financial Conduct Authority. All debt management plans are informal agreements between you and the people that you owe money to. The plan can either be administered by yourself (if you have the time available), a registered debt charity such as Debt Advice Foundation or a commercial Debt Management company. If Debt Management is appropriate for your financial circumstances, Debt Advice Foundation will recommend a non-fee charging plan (see do all debt management companies charge fees). Also see what should I look out for when choosing a debt management company for more info. You can read more about Debt Management and whether it is suitable for your situation in our Debt Management section. Debt Advice Foundation is a registered UK charity offering free, confidential support and advice on any aspect of debt, including Debt Management. If you need to talk to someone about Debt Management or would like to discuss the alternatives, please call to speak to an adviser.