Debt Management Plans
A Debt Management Plan or DMP is an informal arrangement between you and your creditors, it allows you to repay your debts at a rate which is affordable to you. Advice debt do not administer DMPs, we specialise in Individual Voluntary Arrangements (IVAs), if you do not qualify for an IVA we will refer you to an FCA regulated firm for debt advice.
What is a Debt Management Plan?
A Debt Management Plan (DMP) is an informal arrangement between you and your creditors. You make one affordable payment to a debt management company who then distributes this to your creditors on your behalf.
They will usually deal with creditor correspondence on your behalf and request interest and charges are frozen, although this not guaranteed.
Advantages & Disadvantages of a Debt Management Plan
Advantages
- You pay one affordable amount each month
- DMPs are informal so they can be flexible, and the payment can change if your circumstances do
- Some charitable organisations will administer a DMP free of charge
- Creditor contact will usually reduce and the firm administering your DMP will deal with this on your behalf
Disadvantages
- As a DMP is informal your creditors are not obliged to agree to it.
- Your credit score will be negatively impacted
- Your creditors do not have to freeze interest and charges
- Repaying your debts at a reduced amount may take longer to be debt free
What debts can be included in a Debt Management Plan?
- Bank overdrafts
- Personal Loans
- Credit cards
- Payday loans
- Catalogues
- Store Cards
What debts can't be included in a Debt Management plan?
- Court Fines
- Criminal Fines
- TV Licence
- Council Tax Bills
- Current Gas and Electric bills
- Child support arrears
- Mortgage, loans secured against your home
- Hire purchase agreements
Will a Debt Management Plan be accepted by my creditors?
Your creditors may prefer a reduced payment than no payment at all. However, they’re not under any obligation to agree to a reduced payment or DMP.
If you have received advice from an FCA regulated debt advice firm who can administer DMPs they will complete an income and expenditure with you and this is used to evidence that what you’re proposing to pay is all you can realistically afford. Where a creditor agrees to a DMP they may not agree to freeze interest and charges, your debt management company will discuss this with you and speak with your creditors on your behalf.
Why choose Advice Debt?
We can help you.
We all know how difficult it can be when facing financial difficulties. That’s why we are here for you. Our advisers will listen to your concerns and can provide information on the debt solutions available. We specialise in individual voluntary arrangements and you can find more about them on our website.
Advice Debt Top Tips
Committed to providing debt information & solutions
Start with our 3 quick and easy steps
Step 1
Complete our Online Form
Private & Confidential
Our form is user-friendly and is easy to complete.
The first step always feels like the hardest, but you’ve come to the right place.
Step 2
Talk to the Experts
Help without judgement
Tell us about your situation, and we’ll tell you exactly what help you’re entitled to.
We’ll inform you about what solutions you qualify for, and answer any questions you may have along the way.
Step 3
Take Action today
No obligation service
We know that debt is daunting, but after speaking with us, we can put together a personal action plan to put your mind at ease.
We’ll help set things up and support you in dealing with your debts, for however long is needed.
Let's get started
- Safe, secure and confidential.
Our team of experts help thousands of families every year across the UK get their finances back on track.
Prefer to speak later?
We will offer guidance, support and a solution at a time that suits you.
*To find out more about managing your money and getting free advice, visit Money Helper, an independent service set up to help people manage their money.
