A Debt Management Plan is an agreement between you and your creditors to pay all of your debts.
Debt management plans are usually used when either:
You can arrange a plan with your creditors yourself or through a licensed debt management company for a fee. If you arrange this with a company:
The Money Advice Service has information on organisations that can give you free advice about whether a Debt Management Plan is right for you.
Set up a plan with a debt management company authorised by the Financial Conduct Authority (FCA ). Search the Financial Services Register for an authorised company.
The company works out your monthly payments. You’ll have to give details about your financial situation, eg your assets, debts, income and creditors.
The company contacts your creditors and asks them to agree to the plan (they don’t have to).
Unless stated in the agreement, your creditors can still:
Some companies will charge:
Make sure you understand the costs of your plan and how you pay for it.
Debt Management Plans can only be used to pay ‘unsecured’ debts, eg debts that haven’t been guaranteed against your property.
Your plan can be cancelled if you don’t keep up your repayments.