Debt and Debt Management

Debt Management Plans (DMPs) seem to be much in the news at present. A couple of adverse aspects of the industry made the biggest headlines. As with any business just a few bad apples can give the barrel a bad name. In the UK the Office of Fair Trading (OFT) has already taken steps to deal with the bad apples. The most serious infractions it has observed happened in the areas of marketing and charging methods. In September 2010 it gave a warning to 129 debt management companies and then followed that up with high profile enforcement action against the worst offenders. The OFT promises to release revised debt management guidance in June 2011. It is not clear at this point whether the government intends to bring any legislation to regulate DMPs. Even so the Ministry of Justice has released a consultation document in regards to the future of DMPs. Three methods of control are being indicated. These are to somewhat boost control by the OFT, to propose sector self control with voluntary codes of practice and/or to develop a new system i.e. a statutory DMP. Since the DMP is the dominant personal insolvency solution in the UK currently, it is puzzling that the government appears to shrink from the burden of legislating in this area. What is the today’s status of national debt management and how does it impart relief to individuals?