Debt Management Plan
A debt management plan (DMP) allows you to pay back your debts at a rate you can afford. DMP’s are suitable for non priority debts like credit cards, overdrafts & personal loans.
You make 1 monthly payment to your DMP provider who will then in turn pay your creditors. There is a fee involved for managing your DMP, the amount is different dependant on the company you wish to use. There are debt charities who will set up a DMP for free.
- Only pay what you can afford
- 1 monthly payment
- Can add household bill arrears to the DMP to get you back up to date
- Regularly reviewed to make sure it is affordable
Risks of DMP
- Creditors may still contact you
- Creditors may continue to add interest and charges
- Creditors don’t need to agree to reduced payments
- Further action may still be taken against you, CCJ’S etc