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Debt Management

Debt Management is where your creditors agree that you may repay your total debt in more affordable installments over an agreed period of time.

Because they are informal arrangements, there are no solicitors or Insolvency Practitioners involved. But this informality can come at a cost. It is possible for creditors to review your case and push for increased repayments. Although you request that the interest and charges are stopped (and they often do), they are not obliged to do so, so total debts may increase as will the amount of time needed to repay them.

Like all debt solutions a Debt Management Plan should be assessed against all other options. If you feel that a Debt Management Plan is for you, you can either attempt to negotiate a plan yourself or get professional help.

If you do get professional help negotiating a Debt Management Plan you have a couple of options.

  1. Use a charity that does not charge commission or fees for arranging and managing the plan. If you do go down this route, do not expect them to try and negotiate a write-off or early settlement on part of your debt as they are funded by your creditors and understandably don't want to bite the hand that feeds them. Organisations that don't charge for Debt Management Plans include the CCCS.
  2. Use a commercial organisation that will charge fees for negotiating and managing your debt management plan, but is very likely to try and negotiate a write-off or early settlement on your behalf as they are not funded by the creditors.

If you do decide to use a commercial debt management company then ensure you find out:

  • How much you'll be paying in fees
  • What they are going to do with regard to negotating a reduction in your debts and when
  • What guarantees or assurances creditors offer on freezing interest and charges
  • How long you'll be in the plan for
  • How often is the plan reviewed
  • How often will you get a statement of your plans account

You’ll find lots of questions and answers about Debt Management Plans in the Q & A part of the website. If you don't find what you're looking for, why not ask a question. Whichever debt solution you decide to go with, better financial management is essential. It will also increase the likelihood your debt solution working and you not falling into debt again.

Popular companies that negotiate and manage Debt Management Plans

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