“Unlike an IVA, a Dept Management Plan is an informal agreement and is therefore more flexible. You are not legally bound to a DMP, therefore if your situation changes, you can speak to the company managing your DMP and explore other solutions more appropriate to your situation.
If your situation has worsened, and you can no longer afford to meet your agreed monthly repayments and need to reduce them, then the first thing to do is to make sure you creditors are aware of this. Your creditors could ask you to present an income and expenditure statement, which details exactly what has occurred to change your financial situation and the impact it will have on your ability to make the required repayments. Hopefully this will result in your creditors agreeing to reduce your monthly repayments but depending on the severity of your financial problems, it could be advisable to consider other debt solutions.
You may find that a more formal agreement, such as an Individual Voluntary Arrangement, is more suitable. On an IVA you’ll find that, subject to creditor agreement, creditors will freeze interest and charges so that you do not incur more debt and at the end of the IVA term, which is usually five years. Unsecured debt included in the IVA that cannot be repaid, will be written off.
If you were to find yourself in the situation that your financial position has actually improved and you can afford to increase your monthly repayments, then it would be advisable to do so, as it will enable you to pay your debts off in a shorter time frame.”