One of the disadvantages of a debt management plan is that 100% of the outstanding debt has to be repaid. Unlike in an individual voluntary arrangement, creditors do not agree to write any debt off.

This means that it will normally take significantly longer to repay your debt than if you had maintained the agreed payments.

See How long will a DMP Last to calculate how long it will take you to repay your debt using a debt management plan.

A way to reduce the time it takes to repay your debt through a dmp is by settling one or a number of your creditors early with a lump sum payment.

If you have been paying into a debt management plan for a while, a creditor may well be prepared to accept a settlement for as little as 50% of the amount owed if they receive this payment in a lump sum.

Settling one or more of your debts early will accelerate the time it takes to repay your debt in two ways. Firstly your total debt will reduce and secondly, your remaining creditors should be paid off faster as they will take a greater share of your monthly payment

How to Start

Got a question? Why not use the Debt Management Forum which gives you direct online access to debt management experts

Call us now on 0800 077 6180 to discuss how a Debt Management Plan can solve your debt problem