Debt Management Plan Scotland

An informal arrangement set up by debt management companies across Scotland that have since come under a fair bit of scrutiny and are now required to explain all possible debt solutions, formal and informal to allow debtors to make an educated decision.

A DMP works by you paying back what you can afford on low priority, unsecured debts after taking into account your bills. You will make one monthly payment to the debt management company that then pays your creditors for you.

Scottish Debt management summarised

A debt management plan will not write off any of your debt but what it will do is make your monthly payments more manageable. We will work through your monthly living expenses and make sure you only contribute what you can afford to your DMP.

Your monthly payments are consolidated into one affordable payment. Your debt management company will then distribute this amongst the companies you owe money to.

It is not a legally binding set up. This means you can cancel it at any point but more importantly it means that you have no legal protection from your creditors and they will still be able to contact you if they wish. Formal solutions like the Scottish Trust Deed or debt arrangement scheme offer legal protection from creditors.

Stay clear of debt management companies that charge fees

You can arrange a debt management plan for free so avoid talking to companies who offer to provide this service to you for a free. Make sure you get any business that you talk with to illustrate any fees before you agree to enter the plan.

If you live in Scotland a Debt management plan might not be the best option for you. Use our "Do I Qualify" for on the right to see your other options.