A debt management plan is an option that may help you to avoid bankruptcy. A debt management organisation will calculate what you have available to pay your creditors and negotiate new affordable repayments on your behalf.
If the plan is accepted by your creditors you will make one monthly repayment to the debt management organisation, who will then pay your creditors.
The overriding purpose of a debt management plan is to allow you to repay your debt. It is also sometimes used:
You should give serious consideration to the length of the debt management plan. If it will take you longer than 5 years then you should also consider an IVA or personal bankruptcy. You do not want to be in debt for the rest of your life.
Due to the recent economic problems there are now hundreds of organisations offering debt management plans, mainly for their own pockets!
If you are considering a debt management plan the first consideration you should have is where to go for advice. Many companies out there persuade you to use the debt management plan as a debt solution purely for the benefit of their profit.