Debt Management Plan
Costs:
The costs of debt management plans are largely incorporated with the single payment which is paid to the debt management company.
After a detailed income and expenditure assessment has been completed you in conjunction with the debt management company decide what can realistically be paid to all your creditors per month. Providing this figure is sensible the debt management company will approach all your creditors and explain what this single payment will mean for them individually. Before money is paid to the different creditors however fee charging companies have two fees they will deduct.
Invariably fee charging debt management companies take the first month's payment to cover the cost of processing and negotiation they have to carry out on your behalf. After this they take approximately 15% of any further payments.
Non fee charging debt management companies offer a similar service. In their case however 100% of all money paid from you to the debt management company is passed across to the creditors. These organizations then pay 15% of what is collected by them back to the debt management company.
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DMPs: Main
DMPs: Criteria
DMPs: Considerations
DMPs: Costs
DMPs: Merits