Unlike the Trust Deed, you do not get any debt written off in a Debt Management Plan. Because of this, many people believe that it is a solution that should not be considered first if your debt problems are severe.

Unfortunately there is no guarantee that you will be debt free at any particular time in a Debt Management. The reason for this is that nobody can predict how long your creditors will freeze interest and charges for. In contrast the Trust Deed, for instance, guarantees that you will be debt free in three years.

Although when a Debt Management Plan is arranged the hassle from creditors usually reduces, it will increase again as time goes on. A Debt Management Plan, being a non-legally binding arrangement, offers you no legal protection from creditor action.

Many people believe that a Debt Management Plan does not damage your credit rating. However, people who are in a Debt Management Plan are technically missing a payment each month. As time passes this gradually affects your credit rating, which takes 6 years to be restored.

The Debt Management Plan is an informal arrangement, not agreed by a court. For this reason, creditors ar efree to review the arrangement every few months and start to charge interest and charges once again.

In a majority of cases, we are successful in persuading the creditors to freeze interest and charges. However, nobody can guarantee that all creditors will co-operate, and as time goes by it will become more difficult to get creditors to continue to freeze interest and charges.