What is a Debt Management Plan?

What is a DMP?

Debt Management Plans are provided by debt management companies who negotiate with your creditors to change your debt repayment terms. A Debt Management Plan (DMP) can be a good debt solution, especially if your problems are likely to be short term.
There can however be some negative effects to Debt Management Plans and it's worth reading our breakdown of the advantages and disadvantages of a Debt Management Plan to get a better understanding of these.
Sometimes, especially if you don't owe very much in total, creditors may ask you to try a debt management plan before being considered for an IVA.
In a Debt Management Plan we will negotiate with your creditors to try to get them to accept lower repayments and obtain a freeze on any further interest that might otherwise be added to your current debt. We are often 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 you Debt Management Plan.

What are the features of a Debt Management Plan (DMP):

• 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 works by enabling us to take one affordable monthly payment from you. It's affordable because we calculate it against guidelines that ensure you have what you need to live (things like your housing costs, children's and pets' needs, etc are all taken into account: These guidelines have been agreed with creditors and are usually accepted). We then distribute this to all your creditors proportionately based on what they are owed - this means everyone gets their fair share.  Within these payments we do deduct our initial and, thereafter, monthly fee.  By letting us help you this way, you can pay off your debt with the comfort that although finances may tight for some time to come, you will be able to make headway and work towards a debt free future with a clear mind and head held high.