Debt Advisory Services (Scotland) – Specialist Debt Management Plans
What is a Debt Management Plan?
A Debt Management Plan is an informal agreement designed to allow people who are struggling to meet their monthly debt repayments the opportunity to go debt free, making a single more affordable monthly payment via a debt management plan. The debt management company passes the payments every month to the debtor’s creditors until the debts are cleared.
The Debt Management Company negotiates with the creditors to freeze or reduce interest and charges being made to the accounts.
Unlike a Trust Deed or Debt Arrangement Scheme, no public register exists to record the details of those people participating in a Debt Management Plan.
Missing creditor payments or paying lower than the contracted amounts agreed will result in defaults being recorded on your individual credit report. These defaults will remain on your credit report for six years.
For all debt solutions, stopping payments to your creditors may place you into further arrears and it is likely that your ability to get credit will be affected. For debt management plans we cannot guarantee a reduction in interest or charges and repaying your debt over a longer period of time can increase the total amount to be repaid.
A Debt Management Plan may be appropriate if you have a temporary financial problem or if you can’t or don’t want to re-mortgage.
Only unsecured debts such as: personal loans, credit cards, store cards, overdrafts and catalogues can be included in you Debt Management Plan.
As secured loans and certain bills cannot be included in a Debt Management Plan, you will therefore need to ensure that your payments are maintained on the following priority debts and bills such as: mortgages, secured loans, council tax, hire purchase, utilities, TV licence, student loans and court fines.