Benefits of a Debt Management Plan

Here are some of your frequently asked questions about debt management plans.

We've written about the pros and cons of a DMP and now you can find the answers to all your other questions about the benefits of a DMP below, and if your question hasn't been answered, complete our form at the bottom of this page to ask the ClearDebt Community.

• How do I know I'm getting the best advice?
• What if my circumstances change?
• Will I still be able to afford my everyday expenses if I enter into a Debt Management Plan?
• I am struggling to juggle the number of creditors I have and the number of different payments I owe - how will a Debt Management Plan help with this?

Each answer has been categorised into the following:

FACTS - Important information about how a Debt Management Plan works

BENEFITS - Advantages of entering into a Debt Management Plan

BE AWARE - Important issues that may affect your relationship with your creditors, pending or potential court action and of course, your credit rating

 

How do I know I'm getting the best advice?

As you can see from the about us section of our website, our company was built on ethics - ensuring there is a safe place for people in debt to go to with the confidence they will receive sound and accurate advice.  After discussing your situation with you, if our advisor feels your circumstances are not best served by a Debt Management Plan we will tell you. We will always advise you of your best options whether we make money from this or not.

Our advisors are part of the first group of industry specialists to qualify and take CertDR (Certificate in Debt Resolution). CertDR is accredited by Edexcel and welcomed by organisations such as the Ministry of Justice, Office of Fair Trading, Insolvency Practitioners Association and the Insolvency Service. The qualification was officially launched in 2009 by the Debt Resolution Forum (an Industry Body that we are a proud member of) and created to ensure a consistent standard of high quality customer service, knowledge and ethics within the debt solution industry.

 

What if my circumstances change?

Because a Debt Management Plan is an informal arrangement, it is easy to adapt or change if your personal circumstances change. You can replace it with an alternative arrangement (such as an IVA) if that becomes more appropriate at a later date.

 

Will I still be able to afford my everyday expenses if I enter into a Debt Management Plan?

Yes - within reason. As part of the process of entering into a Debt Management Plan, we will help you identify what is 'essential expenditure' - daily and monthly. For example, based on your income, an agreed amount will be proposed to your creditors to enable you to budget for monthly costs of food, mortgage/rent, etc - these are considered essential living expenditure and your creditors do understand that based on your income, a certain amount of money must be put aside for you to still be able to afford these everyday costs.

 

I am struggling to juggle the number of creditors I have and the number of different payments I owe - how will a Debt Management Plan help with this?

By entering into a Debt Management Plan with us, we will take one monthly payment from you (after deducting our fees) and distribute it proportionally amongst your creditors at an agreed repayment rate.