Debt Management Services can propose a debt management plan to your creditors and if accepted manage the plan for you.
A debt management plan is an informal arrangement between you and your creditors to repay your debts over an agreed period of time at a level that is affordable. As part of setting up the plan you ask them to stop interest and charges.
There are two types of debt management. The free debt management plan and the paid for debt management plan. As you might expect the free ones are best but there are only a few organisations that offer them. If you use our debt advice calculator and it shows debt management to be your best option, we'll put you in touch with a leading provider of free debt management plans. If you go down the paid for route you'll pay a proportion of your monthly repayment to the debt management company (usually around 15%). The result of this is you'll pay back more over a longer period of time.
Summary
- An informal arrangement to repay your debts at a level that is affordable
- It's not legally binding so either party can change their minds
- Interest and charges often stop but this is not guaranteed
- Free debt management is preferred over paid for
- Use our debt calculator to see which debt management service is best for you
Comparison Table Of Debt Solutions
| Solutions | Debts Written Off | Legally Binding | Interests & Charges | Residential Status | ||
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Average 58%*
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Yes
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Stopped
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Tenant or Homeowner (Eng/Wales)
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Not Normally
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No
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Many Freeze
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Tenant or Homeowner
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Consolidated
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Yes
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New Rates & Charges
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Tenant or Homeowner
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Bankruptcy is a severe last resort if you are in serious debt and no other debt solution can save you from going bankrupt. Bankruptcy may protect you from your creditors and allows you to start fresh, but you need to think carefully about all the implications involved.
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*58% was the average debt write off with an IVA, April - June 2008, CCCS
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