Debt solutions · 5 min read
Debt management plan vs IVA: which is better for you?
A debt management plan and an IVA both combine your debts into a single monthly payment, but they work very differently. Here is a side-by-side look to help you understand which might suit you.
The key difference
A DMP is informal: you repay your debts in full, just more slowly, and creditors can still take action if they choose. An IVA is a formal, legally binding arrangement: creditors are bound by it and any remaining included debt is written off at the end.
Length
An IVA normally lasts five or six years. A DMP lasts until the debt is repaid, which could be shorter or much longer depending on how much you owe and what you can pay.
Flexibility
A DMP is more flexible — you can stop, pause or change it. An IVA has fixed terms and changes need creditor agreement, though annual reviews and payment breaks are possible.
Credit file and public record
Both will affect your credit file. An IVA is also listed on the public Insolvency Register while it is running; a DMP is not public.
Which is better?
As a rough guide:
- A DMP may suit smaller debts you could repay within a reasonable time
- An IVA may suit larger debts where full repayment is unrealistic
- Neither is suitable if your debts are mostly priority debts like council tax or rent arrears
Compare your options with us →
This article is general information only and may not reflect your circumstances. Rules and limits can change, so always check the details with an authorised provider before making a decision.
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Why do we ask this?
Your total debt amount helps us match you with solutions designed for your level of borrowing.
