Debt Management Plan

Get out of debt at a rate you can afford

What's a debt management plan?

It's a new repayment plan designed to make your unsecured debt repayments and other living costs easier to manage without you borrowing more money. Be aware that by making smaller payments, your credit rating could be affected.

Reduce your payments

If agreed with your lenders, your monthly debt payments will come down to make sure you can afford all your other costs too - however, this may mean it takes longer and costs more to repay your debt.

Freeze interest & charges on your debts

Lenders often freeze interest and charges so you can make some real progress on repaying your debts. We will ask lenders to do this.

We'll deal with your lenders for you

We'll show them why lower payments are the best way for you to repay your debts. We'll also handle paperwork and phone calls on your behalf - they may still contact you; but if they do, just tell them to talk to us

It’s also worth noting that although we’re happy to talk to you about debt management plans, it’s almost certain that a Debt Arrangement Scheme would be a better option for you. Of course, we look at everyone’s individual circumstances and needs. But, because we’re committed to offering the best advice possible, DAS is likely to be the best option out of the two.

A Debt Arrangement Scheme (DAS) is a scheme introduced by the Scottish government to help Scottish residents with unaffordable debt repayments. Unlike a debt management plan, a debt payment programme (DPP) under the Debt Arrangement Scheme is legally binding. So, as long as you keep up with your payments, you will be protected against further action from your lenders as soon as it has been agreed.

Once your DPP begins, it also guarantees to freeze the interest and charges on your debts. So, if you stick to your side of the agreement, you’ll get out of debt sooner. The monthly fees are also structured differently so a DPP may cost less.

If you'd still like to find out if debt management could help you, use the Solution Finder on the right, or call us on 0800 505 3848.

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Frequently asked Debt Management questions

How does debt management work?
Is debt management right for me?
How much will I pay?
Is debt management the same as a debt consolidation loan?
Why would my lenders accept lower payments?
Which debts can you help me with?

Could a debt management plan help me?

If you can't afford to repay your unsecured debts as fast as you agreed to, a debt management plan could be the best way for you to get out of debt. Talk to one of our advisors and we can go over your finances together and find the right solution for you

If it looks like debt management is the best approach for you to take, we can talk to your lenders. We can show them that you can't afford your payments as they stand - but that you could afford to repay your debts if they accepted smaller payments that don't take up money you need for things like rent / mortgage payments and essential bills.

In other words, we'll do our best to show them that agreeing to those lower payments really is the best option for them as well as for you. We'd also ask them to consider freezing interest and charges on your debts.

How debt management works

Debt management can give you a chance to repay your debts more slowly, so you're not stretching your finances too far every month.

We'll talk with your lenders and ask them to accept lower payments and to reduce or freeze the interest and charges on your debts. We can't guarantee they'll agree to this, but our priority is keeping your repayments affordable and working with your lenders to ensure that as much as possible of each payment you make goes towards reducing the balance.

Once your debt management plan has started, you'll make one payment to us every month. This will be based on what you can afford alongside your other living costs, such as bills. From this, we'll pass on an agreed amount to each of your lenders, ensuring they each get a fair share. Our monthly fee will also come out of this payment, so you don't have to worry about an additional bill.

We'll handle all the paperwork, letters and phone calls with your lenders. If you wish, you can tell them to - contact us if they have any concerns, rather than phoning you every time.

We'll review your plan regularly. If your circumstances change, our advisors will be there to help you. For example, if it looks like you can't afford your debt management payments, we can go back to your lenders and talk to them about accepting lower payments. Likewise, if your situation improves, you can clear your debts sooner by increasing your monthly payments.

Downsides of debt management

Although lenders often freeze interest and charges for people on debt management plans, they don't actually have to. If they don't, you could end up paying more in interest and charges in the long run, since your debts will take longer to repay.

Finally, joining a debt management plan means you're not repaying your debts the way you said you would when you borrowed the money originally. This can affect your credit rating.

Debt management advice

I can't afford to pay the bills

If you can't afford to pay the bills, drawing up a budget plan or changing energy tariffs could help save you some money. But if debt is causing the problems, you may want to look into debt management.

Types of debt management in Scotland

You could enter a debt management plan in Scotland - or you might opt for the 'Scottish-only' Debt Arrangement Scheme, set up by the Scottish government.

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