Debt Management Plans

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A Debt Management Plan could be the solution for you if you have enough money left over after paying your priority creditors and essential expenses.

To find out more about priority creditors and how to work out if you've got money to pay off your debts, please visit the debt tools, information and advice.

A debt management plan (DMP) is an arrangement with your creditors to pay back unsecured debt by regular instalments. Instead of you speaking to your creditors yourself to arrange the plan, a Debt Management Company (DMC) does it for you.

The Advantages of a Debt Management Plan:

  • You make only one monthly payment (based on what you can afford) direct to the Debt Management Company. They divide the payment fairly between all your creditors
  • You don’t have to contact your creditors, the DMC will do this for you thus saving you time and stress of having to deal with creditors yourself.  Once the DMP is in place, demands and contact from creditors wil usually cease
  • In the vast majority of cases we will negotiate to get interest and charges frozen
  • A DMP is not a legally binding formal agreement so offers flexibility.  This usually allows you to increase or decrease payments if your situation changes or even cancel the DMP at any time

Things to bear in mind with a Debt Management Plan:

  • You need unsecured debts of at least £3,000 and a disposable income of at least £100 per month
  • Although it is rare, creditors may change their mind at any time about payments they are receiving
  • Your credit rating may be harmed due to default or late payments being registered with the credit referencing agencies.  This will usually be the case anyway if you have fallen behind on payments
  • No debt is written off so unless you have relatively small amounts of debt (e.g. under £15,000), it can take a long time to pay back.  Could an IVA be a better option for you?

Useful Links

>>> IVAs
Useful Debt Tools, Information & Advice
Debt Calculator Tool
Payday Loans
Debt Consolidation Loans
>>> Questions & Answers about Debt Management Plans

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