Debt Management Plan
A debt management plan, or DMP, is an informal debt
restructuring solution for unsecured debt. If you have debts above
£1,500 and owe money to more than one creditor
then a Debt
Management Plan could be right for you!
How does a Debt Management Plan Work?
In a Debt Management Plan we enter into negotiations with your
creditors on your behalf with the aim of getting them to accept
lower repayments. We will also work to obtain a freeze on any
further interest that might otherwise be added to your current
debt.
In a lot of cases we are able to do this and, when not all
creditors agree to this at the start, we will continue to negotiate
with your creditors whilst you keep up the payments to your Debt
Management Plan.
To find out if a Debt Management Plan could be right for you,
take our online debt test now:
Take the online debt test now
>>>
How will a Debt Management Plan (DMP) help me?
Here are some of the key features of a debt management plan:
- Reduce your monthly repayments
- We handle negotiations with all creditors
- You must be able to afford a £100 payment each month (however
in some exceptional cases we may be able to reduce this to £80 per
month)
A Debt Management Plan enables us to take one affordable monthly
payment from you instead of the multiple payments you might
currently be making. We ensure that this single monthly payment is
affordable for you because we calculate it against guidelines
that make sure you have what you need to live (things like
your housing costs, children's needs, etc are all taken into
account: the guidelines we use have been agreed with
creditors and are usually accepted).
We then distribute your single monthly payment to all your
creditors proportionately based on the amount they are owed - this
means everyone gets their fair share. Within these payments
we do deduct an initial and, thereafter, an ongoing monthly fee
(you can read more about our DMP fee structure here: Debt
Management Plan Fees)..
It's worth noting that there can be some negative aspects to a
Debt Management Plan, and you can read more about these here: Debt Management Plan Pros
and Cons.
Frequently Asked Questions about Debt Management Plans
We've compiled a list of the most frequently asked questions
about debt management plans, you can view them all here: Debt Management Plan
FAQ
