Being in a Debt Management Plan (DMP) should not in itself prevent you from offering proposals to your creditors for an Individual Voluntary Arrangement (IVA).
If you are not insolvent the question does not arise, since under the 1986 Insolvency Act you have to be insolvent before you can enter an IVA. Many people who are currently in DMPs are not insolvent, in spite of the financial difficulties they may be encountering. The second barrier to entering an IVA is that while this financial solution is available in England, Wales and Northern Ireland, it is not available in Scotland or the Republic of Ireland. In Scotland the financial solution which is broadly equivalent to an IVA is a Trust Deed. For the Republic of Ireland there is no financial solution remotely like an IVA although legislation to introduce such a solution there has been in preparation for several years now. Under European Regulations, it is entirely possible for you to enter an IVA provided that you live in a member state of the European Union and have your ‘Centre of Main Interests’ or COMI in England, Scotland or Northern Ireland.
While no official figures are available, it is estimated that there are almost one million people in the UK currently in DMPs. Some of these DMPs are self administered where the debtor reaches informal agreements with creditors to make reduced payments on unsecured debts. However, most DMPs are administered by DMP providers who specialize in debt management. If you want to check whether an IVA or indeed some other financial solution might be more appropriate for your circumstances, then you should contact a reputable provider of insolvency services. Such a provider can establish fairly quickly whether you are insolvent or not. If you are insolvent, then you should consider the full range of financial solutions. You could for example, petition for bankruptcy or enter an IVA or seek a Debt Relief Order (DRO). A DRO is limited to debtors with disposable income of less than £50 per month, debts of less than £15,000 and no assets. If you confirm that you are not insolvent, it may be that you might better be able to address your financial problems by for example, re-mortgaging your property and using the released equity to clear your debts or reduce them to manageable levels.
A reputable provider of insolvency services will not charge you for advice in relation to your options. Your current DMP company may well have the expertise in house to review your circumstances and advise you appropriately. In any case, you may want a second opinion before you decide to continue in your current DMP or to try an alternative solution. It cannot hurt to consider changing the status quo particularly because of the lengthy timescale of most DMPs.