Debt Management Plan (DMP)

We do not offer this solution in house, however, we will assess your situation and refer you to DMP provider if you qualify for this solution.

Below we also show the list of main providers of free DMP.

A DMP is a non-binding arrangement between you and your creditors to repay your non-priority obligations. Credit cards, loans, and shop cards are examples of non-priority obligations. You repay the loan with a single monthly payment that is distributed among your creditors. The majority of DMPs are maintained by a DMP provider, who talks with your creditors on your behalf. This implies you will not have to deal with your creditors on your own. A DMP is not legally binding, which means you are not locked in for a certain length of time and can cancel it at any moment.

Is a Debt Management Plan appropriate for me?

A Debt Management Plan is appropriate if you are struggling to meet your minimum debt payments but have some extra money each month after you have paid all of your household expenditures. Household expenses include “priority payments”, which include:

mortgage or rent arrears
gas and electricity arrears
council tax or rates arrears
magistrates’ court fines
arrears of maintenance payable to an ex-partner or children
income tax or VAT arrears
TV licence or TV licence arrears

Priority debts are so-called because the repercussions of failing to pay them might be far-reaching. Because these debts cannot be included in a DMP, you must ensure that you have a plan in place to deal with your priority debts before establishing a DMP.

Bank loans, credit cards, school fees, water costs, and welfare overpayments are examples of non-priority debts.

Our advisors will evaluate your situation and determine whether a debt management plan is appropriate for you.

Advantages and disadvantages of debt management plans

Doing the correct thing is only feasible if a comprehensive image of the benefits and drawbacks of a Debt Management Plan is accessible. A debt management strategy must swiftly bring your bills under control and ease the burden of debt, but it must also include a longer-term plan to discharge your debt.

Advantages:

A Debt Management Plan is intended to allow you to pay your creditors just what you can reasonably afford each month. Creditors will typically agree to accept decreased payments and freeze or cut interest costs.

The main advantage that the DMP provider will handle all creditors and their contact. This involves dealing with phone calls and letters, as well as relieving the stress of creditor involvement.
Creditors may impose a moratorium on interest and charges.
If you are having difficulty making your regular payments to creditors, a DMP allows you to pay a manageable monthly contribution.
A DMP is adjustable. You have the option to cancel your plan at any moment.
A DMP is an informal approach that should allow you to pay off your debt in fewer than ten years. If the plan appears to take more than ten years, a DMP may not be appropriate unless you believe your circumstances will improve, allowing you to erase your debt in ten years.
Creditors have the option to halt further proceedings

Things to Consider:

A DMP is a non-binding debt solution, and creditors are not required to freeze interest and charges. Some creditors may agree to lower rather than freeze interest rates. Continued charges may cause it to take longer and cost you more money to repay your obligations.
Because a DMP is an informal arrangement, some obligations, such as council tax arrears, cannot be included owing to the possibility of action against your assets. There are alternative options, such as an IVA, which might include priority bill arrears
A DMP may have a negative influence on your credit report. Creditors can send default notifications, which stay on your credit report for 6 years. Your creditworthiness will suffer as a result.
You may occasionally receive an unsolicited contact from a creditor, especially if they are utilising a debt collection agency. Inform them that you are in a DMP and provide the name of our firm as well as the name of your personal counsellor. The rest will be taken care of by us.
We cannot promise that creditors will not pursue legal action or that collection activity will cease. If you have property, such action might result in a judgement and even a charging order
If you cancel your DMP, creditors may terminate previously agreed-upon payment arrangements, and charges may be levied to your debts.

Step by step to get DMP

Clear out your priority debts
Determine whether a DMP is appropriate for you (we will assist you here)
Calculate your budget
Consider if you want to pay for your DMP provider or would rather go ahead with a free provider (please see a list of free providers below)

Finding a free DMP provider

National Debtline

National Debtline is a national telephone helpline that provides free debt counselling to people in the United Kingdom. It will provide you with guidance and send you a self-help kit. If necessary, the consultant might recommend you to a free DMP.

https://www.nationaldebtline.org/

StepChange

StepChange is a non-profit organisation supported by the credit industry that offers free financial counselling to persons in the United Kingdom. It performs an initial telephone or in-person consultation, then evaluates your debt history and makes a recommendation. This can include a debt management plan managed by StepChange.

https://www.stepchange.org/

Payplan

Payplan is a corporation that offe(rs a free debt management service to consumers in the United Kingdom. It is a non-profit organisation supported by the credit sector. It will examine your financial situation, recommend a payback plan, and present it to your creditors.

https://www.payplan.com/debtadvice/