What Are Debt Management Companies?

Debt management companies typically operate as not-for-profit and commercial services that help people clear debts owed to secured and unsecured creditors.

In this post, the repossession stoppers at Property Solvers highlight the 20 leading organisations operating in this space.

We also discuss how these organisations work, free vs. paid services, potential damage to your credit rating and whether going ahead with a debt management plan (DMP) is actually worth it.

The Top 20 Debt Management Companies Are…

It’s important to note that using a debt management company is not for everyone and much will depend on your particular circumstances.

For this reason, we have started our recommendations with the organisations that run free services with the paid-for operators towards the bottom of the list…

Citizens Advice

With over 20,000 volunteers from a variety of backgrounds, the well-known advisory service that helps the general public deal with financial and housing issues. Many times, they can assist over the phone or you can book in a time to sit down if your case is more complex.

You can search for information online or enter your postcode / town in the orange box to contact your local office directly (there is no central call centre).

Money Helper

An approved online advice service on all money-related matters sponsored by the Department for Work and Pensions. You can communicate with them via Webchat, WhatsApp (on 07701342744), freephone 0800 138 777 (English) / 0800 138 0555 (Wales) / 18001 0800 915 4622 (typetalk).


Talk to an expert housing adviser any day of the year about your housing situation. Call 0808 800 4444 (if there’s no immediate risk) or 0808 164 4660 (for emergencies). Lines are open 8am-8pm on weekdays and 9am-5pm at the weekends.

National Debt Line

Education, information and advice aimed at simplifying money matters. The representatives will provide advice and send a self-help pack.  They may also put you in touch with a free debt management provider (although you are under no obligation to use their services)

Call 0808 808 4000. Lines are open 9am-8pm on weekdays and 9.30am-1pm on Saturdays.

Business Debtline

Impartial and confidential debt advice to small businesses and the self-employed. Call 0800 197 6026. Lines are open 9am-8pm on weekdays (the office is closed at the weekends).

The Money Charity

Free debt advice and budget management. Please note that this is not a direct advisory service. However, the website does contain a range of useful resources.

Debt Advice Foundation

A charity that provides confidential support and advice to anyone worried about loans, credit and debt. Call on 0800 043 40 50. Lines are open 8am-8pm on weekdays and 9am-3pm on Saturdays.

Step Change

Talk to expert advisors that help over 500,000 people every year overcome their debt problems. Call on 0800 138 1111. Lines are open 8am-8pm on weekdays and 8am-4pm on Saturdays.

Financial Ombudsman Service 

A free complaints service that will impartially assess any disputes between consumers and financial service providers.

Age UK

A free advice line for older people (as well as their families, friends, carers and professionals).  Whilst they may not be able to assist directly with specific debt issues you are facing, they can certainly put you in the right direction.

The Age UK Advice Line is open 8am to 7pm, 365 days a year on 0800 678 1602.

Debt Respite Scheme

Also known as “Breathing Space”, this government scheme was created could help relieve some of the pressure and stress caused by being in debt.

Although there is no direct contact for information about this scheme, the debt management advisors mentioned above should be able clarify how it all works.

Christians Against Poverty

Completely free service with a focus on helping people become debt free. Enter your postcode via this link and you will be given a freephone number to contact to book an appointment at your closest Christians Against Poverty Debt Centre.


A national charity that provides practical help to people struggling financially.  We would suggest heading to the Advice Finder page, entering your situation under “Topic” alongside your postcode and maximum distance.  After clicking “Search”, you will see a number of local organisations who could potentially assist.

Civil Legal Advice (CLA)

This government service is available to those eligible for Legal Aid. Provided that you are,

The CLA can be called on 0345 345 4 345 (Monday to Friday 9am to 8pm). You can also text legalaid and your name to 80010 to ask CLA to call you back. This costs the same as a normal text message.

Property Solvers Stop Repossession Service

Property Solvers have worked with homeowners facing the prospect of repossession for over 20 years. They offer free court assistance in addition to a well-established quick homebuying service.

Contact them 24/7 on 0800 044 3733 or email info@propertysolvers.co.uk.


Established for over 30 years, trained debt advisors provide different solutions based on your particular circumstances. Remember to do your own independent research before agreeing to proceed with an debt repayment plans.  Also, note that PayPlan’s business activities are funded by the credit industry itself which means the service is free.

Connect to one of their advisors online or call 0800 280 2816 Monday to Friday between 8am to 8pm and Saturdays between 9am and 3pm.

Financial Wellness Group

A free debt advice line where their representatives will go through your financial situation before recommending some options. Remember, to seek impartial and external guidance before entering into any kind of “debt solution scheme”.

There is an online chat service, a direct advice line on 0161 518 8285 or you can email them at enquiry@financialwellnessgroup.co.uk.

Freeze Debt

An mobile phone app that aims to “modernise and simplify” the way people manage debt. After you add in your individual debts, budget requirements and assets you hold (such as your property), the smart AI advisor provides relevant information.

Again, always seek independent assistance before jumping into things too fast.


A credit building / improvement tool created in collaboration with Equifax, Experian and TransUnion.

You can choose between LoqBox Spend, Save, Rent and Coach options depending on your own financial objectives.


The UK’s largest debt advice organisation of its kind, Creditfix also has many thousands of 5-star reviews on Trustpilot.

Please seek independent consultation as these kinds of arrangements can come with their own complications.

Call Creditfix on 020 3167 7503 (lines are open from 9am to 8pm Monday to Thursday and 10am to 6pm Friday to Saturday).

How Do Debt Management Companies Work?

Debt management companies will usually start by having a conversation regarding your specific situation – asking questions such as:

  • How much debt do you owe? This includes credit cards, personal loans, overdrafts, bank loans, payday loans, store cards and private loans from friends and family
  • Who are the loan companies you owe money to?
  • Do you have any arrears and/or default notices in your name?
  • What is your monthly income after tax and National Insurance Contributions?
  • Are you employed or self-employed?
  • What assets (such as property) do you own?
  • Do you have any properties that you would consider selling or auctioning (to release equity that will pay off your debts)?
  • How is the debt split between the loan companies?
  • Which loan companies do you owe the most amount of money to?
  • Whether the debts are just with yourself or if there are any other jointly responsible (such as a spouse or business partner);
  • What conversations have you had with the loan companies?
  • Have you broken any previous agreements with the loan companies?
  • Do you have any mortgage arrears or other secured loan debts such as those from hire purchase agreements you have entered into? If so, by how much and how many months?
  • Do you have the means to clear any of the debts yourself?
  • How much do you spend on a monthly basis (such as food shopping, utility bills, council tax, transport and your children’s necessities)?

Debt Management Companies Will Run Through Series of Questions to See What Your Situation Is...

What Happens Next…

With your permission, the representative will cross-reference the information you provide with credit reference agencies or direct with the lenders.

They will then take a close look at your financial situation and how much you can realistically afford to pay clear your debts.  This will take your ongoing bills and expenses into account.

The debt management company then negotiates with your lenders to agree to a set monthly payment and some take a commission as part of the service. This is often known as a Debt Management Plan (DMP).

You will then typically pay them directly, spread over a period of time, and the debt will be cleared with the individual lender(s) on your behalf.  In most cases, the creditors will freeze ongoing interest charges and make arrangements for them to be paid

Your monthly payments will also be monitored to ensure things are kept on track.

Note that the overall amount of debt you will pay back will be lower than what you originally owed.

How Much Are Debt Management Company Fees?

Much will depend on which company you use but you can expect to be charged anything between 12% to 20% of the monthly payment. Others charge a fixed fee which can be spread over the duration of the management plan.

Note that there may also be set-up and administration fees to pay (these can be spread over the term). Watch out for so-called “handling fees” every time you make a payment.

Free providers (usually charities) such as Step Change Debt Charity sustain their operations by getting paid by lenders and credit card companies.

Debt Management Company Fees

Free vs. Paid Debt Management Services

Some argue that commercial debt management companies offer a better level of service as they can avoid being influenced by creditors and, as a result, achieve better outcomes.

Others say that using a debt charity is the best choice as they’re not commercially driven. However, repaying your debts with free providers will usually take longer as there will be lower amounts being paid to your creditors.

Regardless of which option you choose, always read the small print and seek independent advice before signing up. If you do decide to cancel, there may be associated fees and other costly implications.

Related to this, although these plans are not legally binding, if you fall behind payments under the Debt Management Plan – the lender may take more serious steps.

You can choose to change the terms of the plan say, for example, your salary increases and you can afford to clear off more of the debt.

Does Using a Debt Management Company Damage Your Credit Rating?

In short, yes.  This is because using a debt management company will usually mean that your repayments work out lower than what they would be normally.  Creditors may also report that you have defaulted.

As a result, there will be “markers” on your credit report (through organisations like Equifax and Experian).  These will remain on your credit file for 6 to 7 years which could result in difficulties in taking further unsecured loans, mortgages and renting a property. Similarly, any evidence of repossession will also remain on your credit file.

At the same time, using a debt management company can – over the medium term – help you get back into a position where you become creditworthy. It’s certainly a better option than insolvency or bankruptcy

Does Using a Debt Management Company Damage Your Credit Rating?

Is a Debt Management Plan Really Worth It?

Having another organisation take over dealing with your creditors can save a lot of hassle and stress.

The pace at which you reduce your debt may be slower than you expect – often due to lower payments and paying off extra fees if you’re using a paid-for debt management service. The lenders may also still want their interest to be paid back and contact you independently.

Remember to calculate the total amount of debt you will have to pay back including the debt management company’s fees. It may turn out to be more cost-effective to figure out your own way of paying back the debts. Others choose to negotiate with creditors themselves.

Although credit card and other unsecured lenders can be harsh (and sometimes rude) when you approach them, it’s worth facing the situation head first and think about the bigger picture of a debt-free life.

Perhaps you have another way of clearing the debts.  Do you have any possessions that you could sell – perhaps the extra car.  These days, it’s never been easier to get rid of items for a pretty good price on sites like eBay and Gumtree.

Note the Following…

Remember to check that the debt management company is registered with the Financial Conduct Authority (FCA) and follows the Consumer Credit Sourcebook (CONC).  There have been a number of firms that have been struck off in recent years due to non-compliance of the strict requirements of this governing body.

The good organisations will take the time to truly understand your situation and have your best interests at heart. This includes recommending alternative options if it’s the best way forward.

There must be no misleading claims and all the contracts must clearly state the following as a minimum:

  • The exact details of the debt management plan
  • The total monthly costs (including associated fees)
  • The total amount to be repaid and the set timeline

Also, be cautious of companies you come across that offer a “free” service which in many cases is false advertising. Note that most charities operating in this space can be trusted.

Also, with paid-for debt management services, make sure that at least 50% of the monthly payment is paid to creditor. This may increase over the term of the repayment plan – but you should work with companies where the majority of the payments will be going towards clearing the debt.

Remember to also check that your creditors are fully on board with the repayment plan.  Some have been known to demand for full repayment even if you are keeping up with things.