What is a Debt Management Plan?
The debt management plan is often referred to as a 'debt management solution', an 'informal personal plan', or simply a 'pay plan'.
The debt management plan is a simple, yet effective, way for you to pay your unsecured creditors.
Arranging a debt management plan can be ideal if you are going through a short-term bad patch financially, lack of overtime, etc. It will give you control of your finances until your situation improves allowing you to get back on track with your creditors.
The debt management plan is an agreement between you and your creditors that can be made when you are in a situation where you can no longer afford to make your repayments in full. However you may be able to make a reduced offer of payment from your disposable income.
A debt management plan does not involve any legal paperwork or court appearances.
We will send out a trained debt advisor who will ask you a number of questions about your current financial position, enabling them to calculate how much you can realistically afford to pay your creditors. The amount offered is called 'monthly disposable income' (MDI). Your MDI will then be disbursed to your creditors.
Our main aim is to ensure that your priority debts are paid, as non-payment of these can have serious consequences.
This also means that instead of having to make separate payments to all your creditors, or their representatives / appointed collectors, you will have only one single payment to make and we will manage and deal with your case.
Is A Debt Management Plan Right For Me?
If you have debts over £15,000, you should be aware that an individual voluntary arrangement (IVA) would possibly be a better solution to your problem, however not everybody fits the criteria for an IVA, a debt management plan may be the only debt management solution available to you, unless bankruptcy is recommended.
For further information on debt management plans contact us now on 0800 988 7701 or complete the contact form on the left.
Debts Excluded From A Debt Management Plan
There are several debts that fall outside the limits of a debt management plan. These will be fully explained to you upon your visit from the advisor, they include:
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Goods on Higher Purchase (HP).
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Secured loans.
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Council tax arrears.
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Any fine or penalties imposed by a court.
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Liabilities arising under an order made in a family or domestic court action such as CSA claims for child support.
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Liabilities arising under a confiscation order made under S.1 of the Drug Trafficking Act 1986 or S.71 of the Criminal Justice Act 1988.
University Fees
We feel that it is not best practice to include university fees in a debt management plan, as they are only payable once you reach a payment threshold where it is then deducted directly from your wage. We concentrate on paying off priority debts.
Debt Management Plan Information
How Is My Credit Rating Affected?
Things You Need To Know About Your Debt Management Plan
