Debt Management Plans (DMP)
A DMP is an informal agreement between an individual & the creditors.
Debt Management Plan Requirements:
- Your unsecured debts are in excess of £5,000 … OR
- Your outstanding unsecured debt will take up to 12 months to repay
- You have a minimum of 3 Creditors
- You are able to afford a minimum of £100 p/m
- You are in financial difficulty & need to undertake a DMP
- You are aged 18-75
Debt Management Plans are an informal process of negotiation with creditors (of unsecured debt) to reduce the contractual repayment and / or a reduction in the interest / other charges being levied by the creditor.
This can reduce your monthly repayments by around 70%.
Debt Management Plans (DMP) involve providing creditors with evidence of income, assets and your personal circumstances in order to prove what you can and can’t afford.
Pros and Cons of a Debt Management Plan:
— DMP : Against
- A negative to DMPs are that the time scales involved with repaying the debt are stretched out over many years.
- A DMP is a Short Term fix to a Long Term problem.
- You can arrange your own DMP directly with your creditors, but in both cases you can still be subject to aggressive ‘bullying’ tactics.
- If the DMP fails, you can still be forced to take Bankruptcy.
+ DMP : For
- The Debt Management Company will negotiate a budget on your behalf, reducing current loans and credit card payments to one low monthly amount YOU CAN AFFORD.
- To achieve this creditors are asked to freeze or reduce their interest charges and therefore agree to a new lower monthly payment.
- Where interest charges are frozen, the money paid to your credit companies is taken off the debt rather than being used to pay interest charges.
- You then make one monthly payment to the Debt Management Company, who pays your creditors.
- A DMP ensures you can afford your essential bills.
- Secured credit still available to you.
› Look up Debt Management on the Comparison Chart
Complete form top left, or call 0870 112 6234 — speak to trained Debt Counsellors ending Money worries TODAY
Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on a mortgage or any other debts secured on it.
Written quotations on request.
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