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Is a Debt Management Plan better than Bankruptcy


Although both Debt Management Plans and Bankruptcies both fall under the umbrella of ‘debt solutions’, they are essentially very different. For a start, DMPs are informal arrangements that you can leave at a moment’s notice whereas bankruptcies are formally administered by the Insolvency Service. If your debt is fairly low e.g. around £8,000 then a DMP is probably the right way to go, but if it is over £10,000 then it is extremely unlikely that you will ever pay off the debt and remain in the arrangement for many years. We know of a lady who was no closer to paying off the debt 21 years after starting her DMP! Bankruptcy on the other hand solves the problem which is getting rid of the debt once and for all, a bit like surgically removing a cancerous growth.

Something else that needs to be considered is your credit score which will be low for many years, as it will reflect defaults / arrangements. Therefore, if you entered into a DMP last month with a recent debt, it will reflect on your credit file as a default for six years. Even after this period i.e. when it drops off your credit file, you still owe the money. Bankruptcy might sound like castor oil, but we know of multiple cases where people have secured vehicles on finance two years after discharge and they have no debt whatsoever. You be the Judge, but if your debts exceed £10,000 it might be best to bite the bullet and solve the problem once and for all.

‘Is a Debt Management Plan better than Bankruptcy’ is just one of hundreds of questions we’ve answered over the years, but feel free to call us on 01425 600129 if you need to know more or specifically need bankruptcy help. Our staff are ex-financial services and have the experience to get you the best result every time.

Bankruptcy UK-Debt Solution Bankruptcy Experts

Bankruptcy UK-Debt Solution Bankruptcy Experts