A debt management plan is a systematic way of paying down your debts. This plan is generally for those people who are not eligible to get a debt consolidation loan. DMP is offered by credit counseling agencies to help you repay all your debts, over a period of time. The agency representative will help you to make a financial plan for you in such a way that you will have to make a single payment to the agency, and the agency will distribute the money among your creditors. This will be done on the basis of a negotiation between you and your creditors. If you want financial gain, if your goal is to achieve financial freedom, you can go for a debt management plan.
However in the UK, you can have an option with regards to debt management that no other country may be able to offer you. You can have the option to opt for an IVA or an individual voluntary arrangement as this option can help you out of complex debt situations. This option is available in no other country that can be helpful enough for you and your finances to at the same time. This program was first introduced by the UK government more than twenty years ago and has from then on become one of the well known and popular solutions to solve personal financial crisis. However, not everyone can find themselves eligible for the IVA program.
In order to be eligible for the same, you as a debtor will have to owe at the least 15,000 pounds, with regards to a single creditor. Only if this is your situation, you may be able to get the payment arrangements as per the IVA. You as the debtor will also be required to have income at least by a certain level, so that you can go on making the payments as per the payment category advised through the IVA.
Another great thing about the IVA is that it is legally binding with regards to both you as the debtor and the creditor or the creditors, with whom the payment setup was made. In fact, when the payment offers are made through the IVA, if three quarter of the creditors agrees to it, the other creditors will have to agree to the same too.
After the payment arrangement is set up through the IVA, no creditors can go on harassing you for the payments. As per the IVA program, you will be required to make monthly payments but this is supposed to be based mainly on your means. When the program ends after a few years, the creditors are required to write off the amount that is left to be paid. This means that you would no more be harassed by the creditors even after the completion of the IVA. This helps you not only to put of the interest amount by quite a large amount but in lowering the actual debt amount a lot too, in case you owed quite a large amount.