From the debtor’s point of view the attraction of BCY (Bankruptcy) is that in a relatively short period of time all debts can be dealt with and creditors removed from one’s back, so to speak. This is not the case in a DMP (Debt Management Plan), where there is little or no prospect of light at the end of the debt tunnel and creditors are not going to go away any time soon.
Bankrupt debtors will be discharged from bankruptcy in one year although they may have to make payments to creditors via an income payments order controlled by their trustee for up to three years.
Not so in a DMP. Creditors do not write off any debt and indeed some creditors may continue to charge interest and penalties with no freeze on the total debt. The voluntary nature of a DMP is such that neither debtor nor creditors feel bound by its terms. Thus a DMP can last for many years.