Is Debt Management Right for Me?

Your eligibility for a Debt Management Plan cannot be simply determined by answering a few brief questions. You will need to speak to one of our expert One Advice Debt advisors who will conduct a detailed financial Factfind.

However, there are some basic criteria that can be used to see if you are likely to be accepted for a Debt Management Plan.

Am I Suitable for a Debt Management Plan?

1: You have unsecured debt over £5,000.
Unsecured debts include:

•    Credit Cards
•    Store Cards
•    Catalogue debts
•    Personal Loans
•    Overdrafts

You may not think that you have £5,000 of unsecured debt. You may have only borrowed £3,000. But if you have not been making your full monthly repayments for even a year, interest and charges will have been added to your debt, which could well have grown to over £5,000 today. It is important that you obtain up-to-date outstanding balances from your creditors.

2: You are insolvent, meaning that you cannot afford to repay your debt.
Do not mistake the word insolvent for Bankruptcy. Being Insolvent describes your ability to repay your debt and is not a solution. Being Insolvent simply means that you cannot afford to repay your debts each month. That is the full contractual payment and not the minimum payment. Do not fall into the trap of repaying minimum monthly payments and thinking you can afford your debts, because with the interest and charges applied you could be paying for up to 40 years. Once it is determined that you are insolvent, a Debt Management Plan could become an option for you.

3: You have a stable income
A Debt Management Plan is a debt repayment plan and to make repayments you must have an income. You must therefore be employed. You would need to commit to paying a fixed but affordable sum each month to your creditors. To agree to this commitment you need a stable income. Unlike a formal IVA, there is a higher degree of flexibility with regards to your monthly payments. 

Am I Suitable for Any Other Debt Solutions? 

If you think that a debt management plan may not be the right debt solution for you, then there are other avenues that you should consider.

If you have debts over £15,000 which you cannot afford to repay, then an IVA (Individual Voluntary Arrangement) might be the best debt solution for you. It allows a certain amount of debt relief, so any unaffordable debt may be written off. 

Call One Advice for your Debt Solution

These simple criteria represent a generalisation and we would need to speak to you to determine whether you are eligible for a Debt Management Plan. Call one of our expert advisors on 0800 019 5870 or complete the One Advice Debt Test.

Entering into an IVA may adversely affect your credit rating for up to six years from the date of approval.

Your property will be protected within an IVA but you may be required to release all or part of any equity during the period of the arrangement.

Failure to complete the term of an IVA can result in bankruptcy.

(In Scotland, a PTD is the equivalent to an IVA.)