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Debt Management & Creditors

A Debt Management Plan is a plan to help people to manage and repay their unsecured debts when they encounter financial problems.  A Debt Management Plan involves working out a monthly budget on which the debtor can live with surplus cash being used to pay off debts.

The Debt Management Plan can be organised by the debtor himself or by a third party. Most Debt Management Plans are organized by third parties such as a debt management company or by a charity such as the CCCS. The debt management companies charge a fee for their services while CCCS costs are financed by creditors.

Debt Management Plans

Regardless of who organises the Debt Management Plan, the attitude of creditors is crucial to its conduct and success. Research shows that creditors adopt a fairly standard approach to Debt Management Plan proposals and generally assess all such proposals in the same way. Creditors decide to accept or reject a Debt Management Plan based on whether the repayment offer is reasonable. The test of reasonableness is based on a review of the debtor’s income and expenditure.

While some creditors agree to freeze interest and penalties once a Debt Management Plan is in place, this practice is by no means universal among creditors and even where applied is not guaranteed to continue indefinitely. Creditors decide on this matter on a case by case basis and the policy of individual creditors in relation to this matter is not entirely transparent. This lack of predictability on the part of creditors makes it difficult to estimate the expected duration of the Debt Management Plan.

However, creditors generally enjoy good working relationships with debt management companies, particularly the larger and long established companies. One of creditors’ main concerns is to ensure that debtors obtain best advice when considering entering a Debt Management Plan. Their other obvious concern is that fees charged by debt management companies should be reasonable, since fees deducted reduce the monthly payment to creditors and extend the duration of the Debt Management Plan.

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Fees and key info

We are happy to provide you with debt advice only. We only charge a fee if you opt for one of our debt solutions. Fees will depend on which debt solution we provide and what your personal circumstances are. All fees will be discussed prior to commencement of any service or debt repayment plan. Click here to read our fees and key info. Please note: From time to time we may refer you to other services providers or charities such as the CAB.


If you’d like more information on other sources of free debt help and advice you can visit MoneyHelper – an organisation, backed by government and set up to offer free and impartial advice to those in debt. - Click here to visit MoneyHelper