Debt Management for Debt Problems
A Debt Management Plan is a debt solution which enables you to
make an affordable monthly payment to your creditors via a debt
management company. A Debt Management Plan means you only have to
make one monthly payment to one company, who will distribute the
money on your behalf. Your debt management plan will last until all
of your debt is repaid.
People living in Scotland may wish to consider the Debt Arrangement
Scheme as it offers legal protection and is a similar solution
to Debt Management Plan.
Benefits of a Debt Management
- You will pay a monthly manageable sum to one company and they
will distribute the money to your creditors
- You may be able to get your interest and charges frozen
- A Debt Management Plan is an informal solution which means you
are not tied in legally to the solution - you can usually leave a
Debt Management Plan with a month's notice
- You can increase or decrease payments if your salary
- You will be taking action to repay your debt and will be on the
way to becoming free of your debt
Negatives of a Debt Management
- Your creditors do not have to accept your proposal
- Any spare income will be used towards the debt solution meaning
you won't have much disposable income
- You have to repay all of the money you owe - you can't get any
- If you owe more than £10,000 and it will take you longer than 7
years to clear your debt then a Debt Management Plan may not be the
best solution for you
- Some Debt Management companies will charge a fee for
administering your case, however we can point you in the direction
of free Debt Management Plans, if that is the best solution for
- Freezing interest and charges is not guaranteed and court
action may continue
- Repaying small amounts over a longer time may lead to an
increase in the total debt to be repaid
- Your credit rating will be affected for 6 years
Please note that only unsecured debt is included in a debt
management plan so you may not be debt free at the end of the plan
if you have a mortgage. You must also ensure you continue to pay
priority debts such as rent and utility bills.
A for profit debt management company will charge you a fee for
administering your case. A charity providing debt management
plans will not charge you for the solution. Check our debt management
calculator today to see how much longer a for profit debt
management plan would take, and how much the for-profit company
would take in fees. Use our debt management
Debt to Family and Friends
Debt to family and friends can cause relationship problems but a
survey has shown that more people are being forced to borrow money
this way to survive.
As the cost of living increases and employment slowly begins to
recover, people are turning to friends and family to help make ends
The Aviva report has found that the average household in debt
owes £2,000 to friends and family. This is the same amount as being
borrowed on credit cards.
Why Do People Borrow From Friends and
We're experiencing a change in social beliefs surrounding debt.
In the past, people often wouldn't share their debt and money
problems with anybody, including friends and family. However, as
times get tougher and the availability of credit has been
restricted, it's a person's nearest and dearest that are being
asked to help.
The Aviva study compared 18,000 households and also found that
the average family has £13,000 of unsecured debt - a rise from
£9,000 just one year ago.
What To Do In Debt?
It's vital for families in debt and struggling to repay their
contractual payments to get advice. At Debt Support Trust our
charity advisors have helped many people who owe money to friends
and family and can provide tailored debt advice.
Our charity helps people deal with their debt problems. We do
this by listening to your situation and by finding positive
solutions to become debt free. There are always routes out of debt
and we'll help find the right one for you.
If you want our help, you can telephone 0800 085 0226 or
complete an online debt analyser for online debt help.
Criteria to enter a Debt Management
- You must have at least two
- You must have unsecured debt of at
- You must have a disposable income
of £100 or above each month