Debt management: What is it?

Debt management is the management of the outstanding liabilities of either an individual or a company in circumstances where that individual or company is no longer able to service or pay its debt within normal credit or agreement terms.

Debt management Schemes

Debt management schemes are not a formal insolvency process but are regulated and need to be carried out by a regulated debt management company. The debt management company will assess the income and expenditure of the individual or company to calculate an affordable sum to pay on a monthly basis and, on the basis of that information, will seek to negotiate an agreement with creditors for monthly payments, usually without any interest accruing, in order to allow the individual or company to manage their affairs.

However, such schemes are not normally time limited and it will normally be the expectation of the creditors that the monthly payments will continue until the debts have been paid in full. This can lead to these schemes becoming very lengthy, often involving payments over more than 10 years dependent on whether there has been an agreement for interest to be stopped.

Debt management will still have an impact on credit scoring on the credit record of the individual or company concerned.

For more information, a member of the team is available on 0113-242-0808 or to contact via our website.