If you’ve read any of the newspaper articles about insolvency statistics recently, you may also have read about debt management plans – debt solutions that many people see as a good way to get their debts under control without needing to enter an insolvency procedure of some kind.

That doesn’t mean they’re always appropriate, though.

You can’t enter a debt management plan just because you’re worried about your debts, for example. Debt management plans involve making smaller payments to your lenders, and that’s something they won’t consider unless they can see you actually can’t afford the payments you agreed to make when you took your debts on in the first place.

So if you’re quite capable of making your payments, a debt management plan won’t be the way to go. If you’re just looking for a way to cut the cost of your monthly debt payments, you might want to think about a debt consolidation loan. Just remember that the more slowly you repay your debt, the more you’ll pay in interest.

And if your situation is a lot worse, it might be too bad for a debt management plan to be a realistic option. If there’s no way you can repay the money you owe within what your creditors would consider a ‘reasonable’ time, they’re not likely to agree to a debt management plan. You might have to think about entering insolvency instead – bankruptcy, a DRO (Debt Relief Order) or an IVA (Individual Voluntary Arrangement).

Just remember that any kind of debt solution comes with its own benefits and drawbacks – and that two people might need two different debt solutions, even if it looks like they’re facing the same kind of problems.

Basically, don’t commit yourself to anything until you’ve spoken to a professional debt adviser who can help you explore all your options, and who can explain the good points and bad points of the different debt solutions that might be able to help you.