Debt Management Plan (DMP)
A Debt Management Plan (DMP) is a short term solution for reducing the monthly cost of your debts. It is designed for people who have debts that they cannot afford at this specific time due to change of circumstances like losing a job or getting a pay cut or a sudden or gradual increase in living costs.
The process of a Debt Management Plan is quite simple and in some ways quite similar to the IVA. A budget is drawn up and agreed to using your income and expenditure. Your expenditure is prioritised with things like food, utilities and mortgage (or rent) falling top of the pile and your payments to your unsecured debts taking least priority. From this the amount you can actually afford to pay to your lenders is calculated and this forms the revised 'Debt Management Plan' payment to your debts.
Then the advisors will contact each of your creditors for you and explain to them your situation and make them understand that you can no longer afford your debt payments. The people oversee our Debt Management Plan customers are in contact with all the major lenders day-in-day-out and know exactly how to make your case for you. As a result, we never find the creditors object to the revised payments and the Debt Management Plan.
Then once all your lenders are agreed and you are comfortable with the new payment amount all your debt payments are collapsed into one monthly payment to the Debt Management company to make things even more simple for yourself.
The pros of a Debt Management Plan
- Reduced monthly payments
- One payment to cover all your debts
- Interest is frozen on most debts
- You no longer get charged for missing payments
- Gives you breathing space in your budget
The cons of a Debt Management Plan
- Debts in the Debt Management Plan will be in a state of default
- It could take a longer period of time to repay your debts
- Paying debts over a longer period could result in a larger total amount being repaid
- You ability to obtain credit will be impaired
Alternatives to a Debt Management Plan
There are alternatives to a Debt Management Plan. These include and are not limited to Individual Voluntary Arrangement (IVAs) and Debt Relief Orders (DROs). Click the links to see more information on each.
What do DDA do?
Lower payments agreed within 24 hours
Freeze interest and charges
Debts written off
Get us to work for you...
Fill in your details and click the enquire button. We can then call and tell you how little needs to be paid to your lenders... Its much less than you think and most likely much less than you currently pay!