How can a DMP help me?
A Debt Management Plan (DMP) is aninformal arrangement between you and your creditors in which you pay an amount you can afford.
This will result you paying back your debt back in full and will normally extend the time in which you pay the debt back.
A DMP will allow you to reduce your monthly outgoings to your credit commitments. It will also have a negative impact on your credit score and affect the ability to apply for credit in the future.
A DMP will not affect your mortgage providing you keep up will contractual payments.
|Flexible Payments monthly weekly or even fortnightly.||Your credit rating will seriously affected by a DMP.|
|Include credit cards and loans into the plan and other unsecured debts.||Not all debts can be included on a DMP.|
|Short term solution to help with creditor payments and hassle.||Creditors are not obliged to freeze interest and charges.|
|A debt management plan is alternative to Bankruptcy and a Debt Relief order.||Creditors can still take further action on the outstanding debt even though payments are being made.|
|Car finance and hire purchase agreements can still be retained.||Creditors do not have to accept payment arrangements on a DMP|
|No contract with the creditors.||Court fines, criminal conviction fines cannot be included in a DMP.|
|Windfalls or inheritance do not legally have to be paid into the DMP.||In most cases a DMP will not stop bailiff action.|
|DMP can be stopped at anytime.||Creditors can still apply interest and charges on the debt.|
A DMP is a popular solution if you are in financial hardship. You can only apply for a DMP if you’re a resident in England Wales and Northern Ireland.
Majority of the time creditors with freeze interest and charges on your debt however this is not always guaranteed.
If you live in Scotland please click on debt help Scotland for more information on which solutions are available for you.
Here at Free Debt Advice UK we can help you set up a Debt management plan.
With the amount of experience gathered over the years Free Debt Advice UKwill make sure the advice and help you receive is in line with your circumstances.
DMPs are great short term options for you if you feel your situation is going to change for the better in the near future.
You also may be able to offer the creditor’s a reduction on what you owe if you come into any windfall or inheritance.