A Debt Management Plan is a form of agreement among you and your creditors to repay all of your debts. DMPs are usually applied when you can’t afford to pay your debts or when have short-term financial difficulties.
A third-party provider usually set up a DMP. It can be a debt management company or organization like us. Your provider will help you create a realistic budget that will indicate how much you can afford for debt payments after meeting all your household bills or essential living expenses.
The leftover money will then be used to cover your debts by sharing it fairly to all your creditors. Normally, you’ll make payments each month to your DMP provider who will administer and distribute the payments to your creditors.
Is DMP right for me?
We recommend using our free online debt advice tool to determine whether a DMP is the best way to manage your debt problems. We can set up a DMP for you once distinguished that it best suits your needs.
Our debt management plan aims to help you pay off your debts while not sacrificing your essential living expenses. We will design a plan that is tailored fit to your needs, allowing you to have adequate money left that will not leave you stretched. Our priority is to secure your living costs. The plan has to be affordable for you so you can keep your payments up to date. Also, we will make sure that you remain on top of your household bills while on a DMP.
DMPs with Debt.org.uk
Debt management is usually the most suitable solution to debt challenges, a debt management plan will be created by our debt advisor who will evaluate your overall financial situation in particular. The advisor will calculate the best way for you to pay off your debts, most effectively and quickly.
The advisor will use these details as the basis for communicating to each of your creditors.
This is done to renegotiate the terms of your current loans. The advisor will act as your agent. This allows you to take out the stress from dealing with your creditors. Through us, you’ll get new terms for interest rates and monthly repayment levels.
What are the Benefits of DMP?
- You’ll only have one monthly payment and this should be set at an affordable and realistic amount that you can meet each month
- You won’t be legally tied to the agreement, allowing you to leave any time if you wish to
- Since DMP is flexible, once there are changes with your income and expenses it can be modified to adjust your needs.
What are the risks in considering a DMP?
- It can take a while to pay off your debts due to reduced payments
- You may pay higher since interest and charges can be added to your debt even when on a DMP
- Reducing payments through a DMP will affect your credit rating even if your creditors agree to the plan
- Your creditors may still secure court action or further steps such as forwarding your debt to the debt collection agency