If you have Debts of over £2000 then a Debt Management Plan could help by reducing payments to what you can afford.
About Debt Management
A Debt Management Plan (DMP) is an informal arrangement between you and your creditors whereby a reduced repayment amount is agreed. As part of the arrangement, interest and charges may be frozen as long as payments are kept up to date and not missed. A Debt Management plan is usually for people with debts of over £2000 with two or more creditors and is subject to a regular review.
What Would My Monthly Payment Be On A Debt Management Plan?
The monthly payment for your debt management plan would depend upon your circumstances and what you can afford. If you can no longer afford the collective monthly payments from your unsecured creditors, (usually due to a negative change in circumstances) – then the Debt Management Plan would aim to present to your creditors a proposal based on what you can afford (your income minus your expenditure – known as your Disposable Income). The amount of your Disposable Income would be shared among the creditors on a pro-rata basis, depending on the size of each debt.
The minimum monthly payment on a Debt Management Plan (DMP) is usually around £80.
Some features of a Debt Management Plan:
Have 1, Single Monthly Payment For All Debts – Which You Can Afford
Reduced Monthly Payments from £80 (based on circumstances).
Interest & Charges May Be Frozen
Reduce or Stop Creditor Harrassment
Creditors Are Dealt With On Your Behalf
No Obligation, Free Initial Consultation – You Decide Whether to Proceed
What Types of Debt Can Be Included on a Debt Management Plan?
Most unsecured debts can be dealt with including unsecured loans, credit cards, storecards, catalogue debt and other unsecured debts.. Although secured debt (homeowner loans / mortgages) can’t be included in a debt management plan or an IVA, our partners may be able to help by re-structuring any unsecured debt around your secured debt..
Your secured debt MUST be paid as originally agreed with your creditors as a priority, or your home may be at risk if the debt is secured on the house.
Entering into a DMP, IVA or Bankruptcy is likely to affect your Credit Rating
(Although it is likely that your credit may already be suffering).
There is no obligation on creditors to accept the reduced payment plans, nor to freeze interest – however if a plan is administered properly and regular paymemts are made, creditors are usually happier to receive a reduced amount rather than no amount at all.
Regular payments must be made once an arrangement has been made with creditors. Failure to make payments can lead to arrangements breaking and further interest and charges being added.
As an IVA is a formal legal agreement with your creditors – you MUST keep up the repayments. And also inform your Insolvency Practitioner of any change in circumstances.
Sometimes, entering into a debt management plan with your creditors can lead to the overall term of the repayment schedule to be lengthened.
Finding You The Right Debt Solution
If you’re unsure about which debt solution is right for you, or which way to turn, then we can help by putting you in touch with our panel of specialist debt advisors.
Receive Your Consultation
A debt advisor from one of our selected debt partners will contact you to assess your indiviual circumstances and then present you with your debt solution options.
You are then free to decide in your own time whether to proceed.
There is No Charge For Your Initial Consultation