Personal Insolvency
Debt Management Plan
The first step for dealing with debt problems is often a debt management plan. The problem is that debt management plans can be aggressively sold to a desperate client resulting in unaffordable monthly contributions and high fees. Debt management plans are not legally binding on creditors, who can and do change their minds; interest continues to run; payments have to be made over many years to clear the total debt. It’s not unusual to see debt management plans run for ten or twenty years.
However, Debt Management can provide a useful breathing space. It can allow you time to work out what you can afford and deal with your priority debts. Where debts are relatively low and contributions relatively high, a debt management plan can be a solution.