What Questions Should I Ask Before Agreeing to a Debt Solution?

A debt solution can affect your finances, home, credit record and choices for years.

Before signing or agreeing to anything, make sure you understand both the proposed solution and the alternatives.

What exactly am I agreeing to?

Ask whether the arrangement is informal or legally binding, which debts are included, which debts remain outside it and how long it is expected to last.

Ask what you will have to do throughout the arrangement, not only what the first monthly payment will be.

How much will it cost?

Ask for every fee and charge to be explained in pounds where possible.

Find out who receives the fees, whether they come from your payments and whether a free provider or alternative route exists.

What happens if my life changes?

Ask what happens if your income falls, rent or mortgage rises, you become ill, lose your job, separate or develop new caring responsibilities.

A plan that only works if nothing changes for five years may be fragile.

Could my home, car or other assets be affected?

If you own property or valuable assets, ask directly how the proposed solution treats them.

Do not rely on general phrases such as ‘your home is safe’ without seeing what the actual terms require.

What happens if the solution fails?

Ask whether interest can restart, what happens to unpaid debts, whether fees already taken are returned and whether bankruptcy or another insolvency process could follow.

Understanding the downside is as important as understanding the advertised benefit.

Why is this better than the alternatives?

Ask the adviser to compare the proposed solution with a DMP, DRO, IVA, bankruptcy and any other realistic option relevant to you.

If the explanation feels like a sales pitch or you are being rushed to sign, get a second opinion from a free debt-advice service.

Take the paperwork away and read it

Check the figures against your actual household budget and make sure important verbal promises appear in the written terms.

Do not agree simply because you are relieved that somebody has offered a solution. A good solution should still make sense after you have had time to understand it.

7.51: What Is a Debt Management Plan?

7.52: What Is a Debt Relief Order?

7.53: What Is an IVA?

7.54: What Is Bankruptcy?

7.55: How Are Debt Management Plans, DROs, IVAs and Bankruptcy Different?

Important information

This guide provides general information and is not intended to provide financial, benefits, debt, housing or legal advice. Individual circumstances can be different. Check current information from official sources and seek advice from an appropriately qualified or authorised adviser before making important financial decisions.