A debt management plan is an informal voluntary arrangement made between you and your creditors. You will need to complete an assessment of your weekly or monthly household income and expenses. If you have income left over then this will be shared among your creditors. The payments are worked out by the amount you owe to each creditor. This is known as pro rata payments. You can get help setting this up through one of our Debt Action advisors.
Debt Management Plans
The advantages of a debt management plan are:
- All your creditors will be treated fairly.
- All your debts will be paid off at the same time.
The disadvantages of a debt management plan are:
- Not all creditors will agree to a debt management plan and they cannot be forced to do so.
- The debt management plan may take many years to repay and it is important to look into other options before agreeing to this.
- You may still be charged interest.