Unlike the IVA, Debt Management does not allow you to have debt written off. For this reason many people feel that it is a solution that should not be considered first if your debt problems are severe.

Because Debt Management does not involve writing off debt, there is no guarantee that you will be debt free at any particular time. In contrast the IVA, for example, guarantees that you will be debt free in five years.

Although when a Debt Management Plan is arranged the hassle from creditors usually reduces, it will increase again as time goes on. A Debt Management Plan, being a non-legally binding arrangement, offers you no legal protection from creditor action.

It is a common misconception that a Debt Management Plan does not harm your credit rating. However, when you are in a Debt Management Plan each month you are technically missing a payment. Over time this steadily affects your credit rating, which takes 6 years to repair.

As the Debt Management Plan is not agreed through the court, it is an informal arrangement. This means that the creditors can review it every few months and change their minds about freezing interest and charges.

We are able to get creditors to freeze interest in a majority of cases. However, there is no guarantee that all creditors will agree, and as time goes by the proportion of frozen interest is likely to reduce.