A debt management plan is very often the best way to pay off your debts when you cannot afford to make the payments. It's usually the advice given when the debts are relatively small (less than £15000) but can be the best option for much larger debts.

Very briefly a DMP is a list of incomings and outgoings to find out how much disposable income you have to pay back your creditors and it is to be used in the proposal of reduced payments to your lenders in an effort to persuade them to freeze the interest.

The advantage of a DMP along with eliminating annoying phone calls and letters is that it is flexible and informal so that it can easily be adapted to change in circumstances such as an inheritance (I wish),  house sale or unemployment. There are no additional penalties if you default  - and you can do-it-yourself as well as administer it yourself instead of it being set up and being overseen by an Insolvency Practitioner or an Official Receiver in the case of bankruptcy who will charge you  for the privilege.

You can download the forms from us free or obtain from C.A.B. or National Debtline who will help you fill in the forms if necessary and give you some suggestions about what to do if your first proposal is rejected by the lender.

 Other ways of dealing with overwhelming debts are through an Individual Voluntary Arrangement IVA or through bankruptcy.

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