What is a debt management plan?

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So - you've heard about DMP's or Debt Management Plans but wonder what they are and whether this is the solution for you?

A DMP is an arrangement between you and your creditors (people you owe money to) to enable you to make payments to them each month to repay your debts.

A DMP can be done informally by you working out the amount you can afford to pay your creditors then contacting them and negotiating an agreement that they will accept the amount proposed or it can be done with the assistance of a company who carry out the negotiations on your behalf, this allows you to make one payment to the company acting for you and they will then arrange payment to your creditors.

Some DMP companies charge an initial set up fee together with a monthly fee, others state they do not charge these fees - you should be asking this question!

You need to be aware that a DMP is not legally binding on the creditors or you unlike an IVA, and therefore creditors may decide to chase you for the debt or add interest to the amount owed -  in certain circumstances a DMP might be the best option for you but equally there maybe other options which are more suitable to your debt problems.

If you're not sure what information you need or you want to discuss all your options please feel free to give our team a call on 0800 8047447 for a free confidential consultation.

Or complete our enquiry form and we will call you back.