What is a Debt Management Plan (DMP)?

Need some protection from your creditors, peace of mind your creditors are all consolidated into one plan like your monthly payments too?

  • Consolidate your debts into one plan
  • Start reducing debt stress
  • One affordable monthly debt repayment
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  • We do not offer or administer Debt Management Plans but we can sign post you after your advice if this is an option you choose.

So what exactly is a Debt Management Plan (DMP)?

 

Aa Debt Management Plan or also known as a DMP is a private agreement between you and your creditors to pay what is affordable each month to allow you to control your debts, this would normally need renegotiated every 6 six months and is not legally binding.

This does not go on your credit file as it is not a legally binding debt solution and does not guarantee to freeze interest and charges.

Lady reading up what an IVA is

Benefits of using a Debt Management Plan?

 

 

 

  • The interest and charges could be frozen if the creditors agree to it
  • If you use a regulated body to help you with your plan they will deal with your creditors for you
  • You can consolidate all your debt into one affordable monthly repayment
  • The plan itself will not go on your credit file
  • This can give you peace of mind that your debts will not snowball out of control

Risks of using a Debt Management Plan?

  • The plan is not legally binding so creditors can still pursue you for the debt or take legal action
  • Creditors do not have to agree to the plan or freezing further charges or interest
  • You may have to pay fees if you use a for profit Debt Management company
  • This can take a long time to get debt free as you are unlikely to write any debt off
  • You are likely to get defaults on your credit file for not paying debts in the full contractual payments which can last six years
woman learning about a protected trust deed on the debt helplines website