Debt Management Plan
Criteria:
Unaffordable debts
To benefit from a debt management plan it is necessary to show that when taken together the payments to all your debts are unaffordable at their current level.
To be able to demonstrate this point an income versus expenditure planner needs to be completed.
In completing this it is also necessary to understand what amounts your creditors would expect to see for the different types of personal expenditure.
For example were you to spend very high sums on haircuts your creditors would want to question whether this was reasonable before they approved the plan.
Treat Creditors Fairly
The second factor which will influence whether your creditors are prepared to accept lower payments is the time which has lapsed between out a debt and seeking to lower payments and freeze interest.
If the time lapse is less than six months some creditors will be reluctant to accept lower payments believing you knew that the loan or credit you were using was unaffordable.
Tolerance does exist around this point and creditors do look at the reason why debts are now unaffordable.
Size of payment
The amounts which can be paid to a creditor also play a role in determining whether a debt management solution is possible.
Organising a debt management solution is in effect a negotiation.
Something needs to be offered to the creditors in return for freezing interest and reducing payments.
If it is not possible to offer a creditor anything meaningful at all then a debt management plan is not a possibility.
Use our FREE Credit Report to see if you are eligable for an IVA.
DMPs: Main
DMPs: Criteria
DMPs: Considerations
DMPs: Costs
DMPs: Merits