How long will my debt management program last?


How long your Debt Management Program lasts depends on four crucial factors:

  • How large your debts are when you enter the arrangement
  • Whether the plan is fee charging or non-fee charging (see do all debt management companies charge fees)
  • How many of your creditors agree to freeze interest (a Debt Management Plan is not a legally binding solution which means that the companies you owe money to are not legally obliged to freeze interest)
  • How much you can realistically afford to pay back each month (this is calculated by subtracting your essential monthly living costs from your monthly income)

Example 1:- Let’s assume you owed £10,000, that you have £200 left over at the end of each month to pay towards your unsecured debts, that all of your creditors agree to freeze interest and that you choose to enter a non-fee charging Debt Management Plan. In these circumstances, it will take you 50 months to pay back your debts in full.

Example 2:- Let’s assume you owed £10,000, that you have £200 left over at the end of each month to pay towards your unsecured debts, that all of your creditors agree to freeze interest but that this time that you choose to enter a fee charging Debt Management Plan, where 15% (£30) of your monthly repayment is retained by the company to cover their fees. In these circumstances, it will take you almost 59 months to pay back your debts in full.

Example 3:- Let’s assume you owed £10,000, that you have £200 left over at the end of each month to pay towards your unsecured debts, that you choose to enter a fee charging Debt Management Plan but that this time, only half of your creditors agree to freeze interest (which is 10%). In these circumstances, it will take you 70 months to pay back your debts in full.

You can read more about Debt Management and whether it is suitable for your situation in our Debt Management section.

Debt Advice Foundation is a registered UK charity offering free, confidential support and advice on any aspect of debt, including Debt Management. If you need to talk to someone about Debt Management or would like to discuss the alternatives, please call 0800 043 40 50 to speak to an adviser.