iThis solution is available throughout the UK.
Managing a DMP
Once a DMP provider calculates what you can realistically afford to pay towards your debts each month, and that it’s the most suitable solution for dealing with your debts, your DMP can be set up. Once the necessary paperwork is sorted out the provider will then contact your creditors to explain your situation and confirm the amount you’ll be paying them.
You’ll need to send your debt management plan provider a payment each month, usually by Direct Debit. The DMP provider will then pay your creditors on your behalf according to the terms of the plan. You don't have to worry about contacting your creditors to reduce your payments; this’ll be done for you.
As a charity we offer free debt management plans, however some DMP providers charge for them. If you have a DMP with a fee-charging company, it means that you’ll pay fees to them as well as making payments towards your debts. As a result it’s likely to take you longer to pay off your debts.
Considering a DMP?
We can help with free, impartial debt advice online now.
Things to consider while on a DMP
Once your DMP starts, you’ll need to stick to your agreed budget. You’ll also need to review your budget with your provider at least once a year. Your provider will contact you to arrange this.
If you receive a cash windfall during your DMP, we recommend you contact your DMP provider to talk about how this can be best used. Also, keep in mind that because you’re making reduced payments on your debts, a DMP will affect your credit rating.
When on a DMP, interest and charges may still be added to the amount you owe. Also, being on a DMP does not protect you from further court action. Creditors can continue to contact you and are likely to send you annual summary statement of repayments. In fact, they’re obliged to do this at least once a year due to regulations put in place by the Financial Conduct Authority (FCA).
Is a DMP right for you?
Debt management plans are not suitable in every situation, but if a DMP is right for you we’ll help you every step of the way. Find out the best debt solution for you by using our free online advice tool. Alternatively, you can call our free advice line and speak to one of our advisors.
