A Debt Management Plan is an agreement between you and your creditors to pay your debts via a regulated company.

Debt management plans are usually used when either:

• you can only afford to pay creditors a small amount each month, over a longer period of time
• you have debt problems but will be able to make full repayments again in a few months

This only applies to people living in Scotland.

A trust deed is a voluntary agreement between you and the people you owe money to (also called your creditors). You agree to pay a regular amount of money towards your debts and at the end of a fixed time, the rest of your debts will be written off. 

Debt Relief Orders (DROs) are one way to deal with your debts if you owe less than £20,000, do not have much spare income and do not own your home.

If you get one:

• your creditors cannot recover their money without the court’s permission
• you’re usually freed (‘discharged’) from your debts after 12 months

Debt Consolidation means taking out further credit to replace (consolidate) existing debts.

This is often in the form of a personal loan although homeowners with equity may be able to access other types of credit secured against their property.