Debt Management Plan
Description
Your monthly income and outgoings will be assessed. Based on your surplus income available to pay creditors, we will negotiate with them to arrange a lower regular payment. We will also deal with correspondence from your creditors on your behalf. You make one affordable payment per month and we distribute it to your creditors.
Eligibility
You will be struggling to meet current repayments to creditors. Your debt level may be below the amounts usually required to enter an IVA (or Trust Deed in Scotland). You must have a certain amount that you can pay on a regular basis to clear your debt.
If you can afford to pay £100 per month or more, a debt management plan might be a good option for you.
Advantages
- Takes the pressure off
- We will attempt to negotiate to reduce or freeze your interest payments
- Good option for people who can afford to make regular payments to their creditors and want an easy, hassle free way to pay
Disadvantages
- If you miss payments on a credit debt, this will be recorded on your credit reference file by your creditor. This will usually make it harder for you to get credit in the future.
- Some creditors may ask for a note to be put on your credit reference file to say you are on a Debt Management Plan
- A Debt Management Plan requires long term commitment from you to pay off all outstanding debt which can take many years dependent on the amount of debt and disposable income