Generally speaking creditors are committed to helping people who are doing their best to repay their debts as quickly as they can afford to. They want to ensure that those who enter into a debt management plan can see their overall debt level reducing. It is also in the interests of creditors not to create additional potential bad debts on their books by adding interest charges which may never be repaid. For this reason creditors do very often agree to freeze the interest on accounts despite being under no legal obligation to do so.

However it is important to understand that no one can guarantee that interest will be frozen if you start a Debt Management Plan. The fact is that the decision to freeze interest (or not) can only be taken by the lender.

How to improve your chances of getting interest charges frozen in a DMP

To give yourself the best chance of getting interest frozen, you should follow these simple rules:

1. Make sure your offer of payment is reasonable. Your expenses should be based on the guidelines generally accepted by the creditors so that they are comfortable that you are making your best effort to repay as much as you can.

2. Maintain your payments regularly and on time. Once you have agreed your monthly dmp payments, ensure that you pay them regularly. If you miss payments, your creditors are more likely to lose faith in your promise to pay them and start to add interest once again.

3. Give creditors time to agree. It may take up to three to six months for your creditors to review your payment proposal, agree it and freeze further interest. Some banks will not consider freezing interest until an account has fallen more than three months into arrears.

What can you do if interest charges are not frozen?

If you start a Debt Management Plan and interest charges are not frozen immediately be patient. In such a case the debts in the debt management plan may temporarily increase until the interest is subsequently frozen a few months later. However it is vital to continue making payments you have proposed.

If creditors simply refuse to freeze the interest on your accounts you may need to consider whether the plan is a suitable debt solution for you. In this situation it is also sensible to consider a more formal type of debt solution.

If you start an Individual Voluntary Arrangement it is guaranteed that no further interest charges will be added. However there are other implications that you also have to weigh up.