A Debt Management Plan (DMP) helps residents in England, Wales and Northern Ireland manage their debts and pay them off at a more affordable reduced monthly amount. Further creditor interest and charges are often frozen. In Scotland, it is possible to agree a Debt Management Plan, however a more legaly binding solution exists known as a Debt Arrangement Scheme.
How Does A Debt Management Plan Work?
Once a Debt Management Plan provider calculates what you can realistically afford to pay towards your debts each month, and that it’s the most appropriate solution for dealing with your debts, your Debt Management Plan can be set up. Once the necessary paperwork is sorted out, the DMP provider will then contact your creditors to explain your situation and confirm the amount you’ll be paying them towards their debt. Many debts can be included within a DMP including Credit Cards, Bank Loans & Store Cards e.g. New Look, River Island, Selfridges. Catalogue Debts can be included also. e.g. Simply Be, Littlewoods and Freemans
Debt Management Plans - Pros and Cons
Debt Management Plans ar suitable for UK residents. Residents in Scotland may also qualify for a Debt Arrangement Scheme.
You will no longer need to deal with creditor harassment
Creditors may be willing to accepts reduced payments from a third party
A DMP shows your willingness to tackle your debts
A DMP requires your creditors continued support which can be withdrawn at any time
Your creditors can still take legal action at any time causing plans to fail
Not legally binding so you don’t have legal protection