A Debt Management Plan (DMP) allows you to reduce the amount you pay towards your unsecured debt each month so that your payments fit within the budget that you can afford.
Included in this article:
Need more advice? Give us a call (0800 088 7376) or complete the form below to speak to one of our experts
The principle behind a debt management plan is that you cannot pay more than you can afford. As such you simply have to reduce the payments you are making.
By using the Plan you are asking your creditors to accept reduced payments based on what you can afford rather than what they ask for. If they feel the amount you offer to repay is reasonable they will generally agree.
The agreement is informal and therefore not legally binding. This means that it is quick to implement allowing you to get back in control of your financial situation fast. It is also flexibility allowing you to change your payments and start or stop at any time.
When you call us, we will advise you about whether a Debt Management Plan is the right debt solution for you however.
We do not provide an in house DMP service. If you decide to start a DMP we can help by directing you to the appropriate free or commercial DMP provider depending on your circumstances and preference.
If you are self employed you will normally need to use a commercial debt management company to implement your Plan. The free service from the Step Change debt charity will not be available to you.
More information about the solution is available in the left hand column. However only a brief overview is given here. For more details and advice please see one of our dedicated information websites:
As well as the information found on this website the Government’s Insolvency Service has produced a useful guide to personal debt solutions which you might also find useful: “In Debt – Dealing with your creditors”.
Money Helper (provided by the Money & Pension Service) is an independent service set up by the Government to provide people with free advice about all aspects of personal finances. For further information, please follow this link: Help if you are struggling with debt.
It is also recommended that you read this one page document produced by the Money & Pensions Service entitled “Dealing with debt – 5 things you should know”.