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Hundreds of thousands of people who are repaying their debts under debt management plans (DMPs) do not appear on the government's official insolvency figures, new research has revealed.
A YouGov survey, conducted in association with R3, found 600,000 people living in the UK have DMPs, which are formal agreements between debtors and their creditors.
The study showed that the number of people with DMP arrangements is four times greater than those with individual voluntary arrangements (IVAs) and twice as many as those declared bankrupt.
Nick O'Reilly, president of R3, said a DMP can be an informal alternative to bankruptcy and IVAs, but there is concern that such arrangements can be "prolonged".
"The desired outcome is to give people whose debts have become unmanageable a sense of control back. In the cases where individuals do not know how long the arrangement will last this goal does not appear to have been met," he remarked.
Some fear that such informal agreements could become a "life sentence", he added.
The organisation said it has been calling for DMPs to be included in official figures for some time.
In August, the Insolvency Service reported that there were 3,500 compulsory liquidations and creditor's voluntary liquidations in England and Wales during the second quarter of this year.
