In an IVA all creditors have to stop all interest charges, in a Debt Management Plan they don't have to. However generally they will freeze interest and charges if you are suffering financial hardship.
You can contact the credit card companies yourself to see if they will stop interest and charges on your accounts, but you may find that they won't.
As Andy has said, the IVA automatically suspends interest and charges and whilst it is not guaranteed in a DMP, in most cases creditors will agree to do so.
When we were in a DMP we were fortunate that the creditors froze the interest and charges but as the others have said, that's not guaranteed and even if they do, they can reinstate them at any time.
Most commercial debt management companies will claim to stop interest and charges in over 90% of cases, so there is a good chance you could benefit from this if a DMP is your preferred route.
Hi Dipsy - Harpic makes a good point that yes, they could freeze interest but they do have the right to reinstate it if they want to. You can approach your creditors yourself to request stoppage of interest and agree a repayment plan or you can instruct the service a DMP company to do it for you who may have a better chance. It depends on how many creditors you have and if you want to manage them yourself. You can come out of a DMP at any time so if interest starts being added you could look at an IVA then to ensure interest is guaranteed to be frozen. It is best to have a chat with a couple of companies to look at all your options to make sure you are doing the best thing for you based on your circumstances.
Regards, Tina Shortland, Debt Advisory Manager for Melanie Giles at Debt Advice TV.
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