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DEBT MANAGEMENT

Debt Management Plan

NTF Financial Solutions are an Insolvency Practice licensed by the Institute of Chartered Accountants in England and Wales to provide insolvency solutions and are not authorised to give advice on and/or manage a Debt Management Plan.

A Debt Management Plan is an informal way of restructuring your debts so you pay a lower, but affordable payment every month over a longer period of time until you have paid everything you owe or until you can resume normal payments again. Some Debt Management Companies charge fees for this service, however, there are companies in the market who can provide this service for free. Creditors are also often willing to freeze the interest, charges and fees on your debt to stop it spiralling and give you the breathing space to make serious inroads into becoming debt-free.

We will look at all of your finances as whole – what you earn, spend and owe – and assess what you can realistically afford to pay to creditors every month. If after considering your options you consider a Debt Management Plan most suitable to your circumstances we would recommend you contact the Money Advice Service.

However like all debt solutions, DMPs have their advantages and disadvantages that have to weighed up carefully before you decide to go ahead:

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  • Fair and open way of sharing payments, widely understood by creditors.
  • The debt management company will help you prepare your plan, including agreeing the level of your household and personal spending based on guidelines, which can then be used to put your case to the creditors.
  • The debt management company will negotiate with creditors on your behalf, so offers are more likely to be accepted and interest frozen than if you try to do this yourself.
  • You may be able to vary your payments if your circumstances change.
  • You make single payments each month or quarter to the debt management company, which is responsible for administering all payments to your creditors.
  • Any monthly payment you make should be passed on to creditors within 5 working days.
  • Some debt management companies do not charge you a fee.
  • Creditors may be prepared to write off the balance of what you owe after a period of time if:

    • you have shown that you have made every effort to repay them as much as you can
    • you have maintained regular payments to the debt management company


  • The debt management company cannot force creditors to accept your proposal or freeze interest. A plan is not binding on creditors who refuse to take part in it, but they cannot refuse to accept any payments made to them.
  • You remain liable to pay your debts until they are paid in full.
  • Creditors could still take enforcement action against you, for example by getting a county court judgment and then an order, which creates a charge on your home*, even if you are keeping up your payments under the plan, unless they agree not to do so.
  • You may not be able to make reduced offers if your circumstances worsen and you can no longer afford your agreed monthly payments.
  • A plan can last for several years. However, some creditors may be prepared to freeze interest for only a shorter time. If interest and charges cannot be frozen for the full length of the plan, then the total amount you end up paying under the plan could be more than the original amount of your debts, and could extend the lifetime of the plan.

    * Having a charge on your home means that if you do not repay the debt, the creditor has a claim on the proceeds if the property is sold.