For certain individuals, especially those on low incomes or who are dependant on benefits, relatively low levels of debt can cause deep distress and concern. Formal insolvency procedures are often inappropriate, or unacceptable to creditors, in these cases.
Unfortunately a whole industry of high interest lending has grown, often targeting "low income" groups and making a debt problem worse.
A "debt management plan" may be a solution. Whilst not giving the protection and certainty of an Individual Voluntary Arrangement, the basis of debt management is that the affordable monthly disposable income of an individual is calculated and this amount is offered to creditors.
Creditors accepting proposals for debt management will often suspend interest and penalty charges so that the core debt can be repaid.