Debt Management Plan
Is a Debt Management Plan (DMP) right for me?
- Yes, if you are satisfied that you could repay your debts in less than five years if your creditors agreed to freeze interest and stop charges.
- Yes, if your financial circumstances are temporary, perhaps due to unemployment or a short/medium sickness which is stopping you from working.
- Yes, if your debt level is below £15,000 and you are struggling to pay your monthly commitments.
- If you can't pay off your debts in less than five years, you may be better off with an Individual Voluntary Arrangement (IVA).
A Debt Management Plan (DMP), allows you to repay your creditors on a pro-rata
basis over an agreed period of time. Your monthly payment is calculated by deducting
your normal living expenses from your income, and will be presented to your creditors
by a debt management company. Because a Debt Management Plan (DMP) is an informal
arrangement your creditors are not obliged to agree to your payment proposition,
but they are more likely to accept it once they have been made properly aware
of your true financial position. Once your creditors have agreed to your Debt
Management Plan (DMP), it is your responsibility to continue paying the agreed
monthly repayments to the Debt Management Plan's (DMP's) administrator. The Debt
Management Plan's (DMP's) administrator, which is normally the debt management
company who drafted the plan, will then ensure that these payments are distributed
promptly to all your creditors on a pro rata basis, until the plan has been successful
completed. Each Debt
Management Plan (DMP) should be regularly reviewed, especially to consider whether
creditors would accept early settlement. Once a Debt Management Plan (DMP) is
completed, you will be debt free and able to make a fresh financial start. Before
you take out a Debt Management Plan (DMP), make sure that you use a fully licensed
debt management company that adheres to the DTi's debt management guidelines.
It is important to establish any charges that you may have to pay for a debt management
company's services.
Also, ask to see evidence that they are trying to, or have already secured a freeze on all charges and interest made by the creditors and make sure that this continues throughout your Debt Management Plan (DMP).
Call free on 0800 088 7502 to find out more or get help with applying for a Debt Management Plan (DMP) by filling in the form below.
|
| |
