Debt Management Plan is a debt solution that allows you to make decreased monthly repayments to your lenders

In a nutshell A Debt Management Plan (DMP) is one of the best debt management solutions with a repayment schedule that fits in with your income and expenditure.

Payments are made monthly to a debt management agency, who will act as an intermediary between you and your creditors.

This debt management help is only suitable for non-priority debts, which can include…

  • Overdrafts
  • Personal loans
  • Bank or building society loans
  • Money borrowed from friends or family
  • Credit card, store card debts or payday loans
  • Catalogue, home credit or in-store credit debts

This debt management help can’t include:

  • Court/legal fees fines
  • TV Licence
  • Council Tax
  • Gas/electricity/utility bills
  • Child support and maintenance
  • Income Tax, National Insurance and VAT
  • Mortgage, rent and any loans secured against your home
  • Hire purchase agreements

A wide variety of free debt management advisor can organize a Debt Management Plan. This approach ensures that your payments are paid in full to your creditors.

What debt problems is this debt management services suitable for?

A DMP might be the one of the best debt management solutions for you if you’re keeping up with repayments on priority debts (e.g. mortgage/rent and council tax) but are struggling with debts such as credit cards and loans.

Our debt expert’s opinion on the pros and cons of this debt management help…

Advantages of Debt Management Plan (DMP)

  • Someone else can deal with your creditors on your behalf.
  • A single monthly payment may help you manage your finances better.

Disadvantages of Debt Management Plan (DMP)

  • Your overall debts will take more time to repay.
  • Your creditors may not freeze the interest and surcharges on your debts.
  • Your creditors may ignore your requests, or they could continue to contact you.
  • A DMP may appear on your credit history, and your credit score could be affected.

Worried about debts that won't go away?

FAQs – Debt Management Plan

    • How much will I need to pay each month?

Every DMP is different. How much you pay will depend upon your exact circumstances, and your income and expenditure. Contact your debt management agency to check for available optons.

    • Will all my creditors accept my proposed repayments?

There are no certainties, as your creditors aren’t legally required to accept your suggestion of repayment. That said, most reasonable creditors will accept a proposal if it’s genuinely how much you can afford to repay, and you don’t pay certain creditors more than others. Hiring specialist debt management services will help you resolving any such issues.

    • Will my employer be aware of my DMP?

No – unlike other debt solutions, a Debt Management Plan (DMP) does not involve a public register of names.

    • How much does a Debt Management Plan (DMP) cost?

The fee you pay will depend on the debt management agency you choose; however you should never pay more than 50% of the total monthly repayment to the debt management services hired. The debt management help fee may also depend upon your disposable income.

    • Would a DMP impact my credit rating?

Yes, unfortunately this is unavoidable, as your credit history will show that you are no longer servicing your debts at the initially agreed rate. If you’ve already racked up defaults and arrears, these too may have been recorded on your credit file. Any records remain on your file for six years.

    • What would happen to my DMP if my circumstances were to change?

Because a Debt Management Plan is flexible, it can change as according to your needs. Just speak with your debt management advisor as and when required.

    • Can I cancel a Debt Management Plan (DMP) after it’s set up?

As a DMP is an informal arrangement between your creditors and you, you could change the terms of the agreement or cancel the DMP outright.
However you should be very careful in doing so, as your creditors may quickly become less open to discussions as to how you repay your debts moving forward. Consult with your debt management advisor as and when required.

    • Can I repay my Debt Management Plan (DMP) early?

Yes you can. You can do this by either increasing the amount of your monthly repayments or, if for whatever reason a lump sum of money becomes available to you, you can settle the debt in one go. Better consult your debt management solutions provides.

    • What will happen to my house if I enter a Debt Management Plan (DMP)?

While your house isn’t ‘tied’ to any DMP, nor are you required to release any equity as part of the DMP terms, you need to understand that a DMP is not legally binding. This means that your creditors are free to take further action against you or your property in the future. This is just one reason why you should always try to keep up with your DMP repayments. In case of any confusion talk to your debt management agency.

    • I’m self-employed – am I eligible for a Debt Management Plan (DMP)?

Yes, and even if some of the debts are business debts (for example – if you’re self-employed and have business debts on a credit card or an overdrawn bank account) you can still include them in the DMP. You should however be aware that if you are indebted to suppliers, that they are not obliged to accept reduced payments, nor must they continue to supply you with goods. HIre the best debt management services to settle all your debts.

    • My spouse and I are both in debt – should we have a joint Debt Management Plan (DMP)?

There is such a thing as a joint Debt Management Plan, and it may make sense to roll all your debts into a single plan if this will make your finances more manageable. Talk to our debt management help line today! Call Us Free 0800 002 9051

    • How long will my Debt Management Plan run for?

The duration of your DMP depends on your personal situation. Once your debt management advisor understands your circumstances, your debt management agency should be able to give you a good idea of the length of any future arrangement.

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