Whether or not you choose a Debt Management Plan (DMP) will largely depend on how much you owe, how much you can afford to pay back each month and your attitude to repaying your debt.
Note: A DMP is available for those living in England, Wales, Northern Ireland and Scotland. However if you live in Scotland this solution may not be the most suitable for you and you should also consider alternatives such as a Debt Arrangement Scheme.
Because you will reduce the monthly payments you make, this means that using a DMP will significantly increase the time it takes you to repay your debt. As such, it is important to get an idea of how long this will be before you start the plan and whether you are comfortable with the extended payment period. If it is likely to take many years to repay your debt using a DMP it might be better to consider an alternative option which gives a fixed repayment period.
Even if on the face of it, it would take a significant amount of time to repay your debt, a DMP may still be appropriate if all you are looking for is a temporary period of reduced payments. If you know that your financial situation will improve in the short term and then you will be able to increase your payments again or even pay off your debt in full, a DMP may be ideal.
Home owners will often choose a DMP as unlike other debt solutions there is no obligation to try and release equity from your property to help repay your debt.
However homeowners should also consider that even if a DMP is in place there is no legal protection from creditors. This means they could continue to take legal action against you in the form of applying for a legal charge against your property.
A Debt Management Plan is not the only debt solution which might be suitable to resolve your debt problem. Before making your final decision to start a DMP you should also consider the other available debt solution options. For more information please see: Personal Debt Solutions
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