Debt Management Plan (DMP)
When you’re in debt, even for a short time, it’s easy to feel that you’re not in control of your life. A DMP could be the answer…
What is a Debt Management Plan
A debt management plan is an agreement between you and your creditors (the companies you owe money to), to make a reduced set monthly payment.
The plans are managed by companies known as debt management plan providers, such as Debt Free Direct who negotiate with your creditors and manage the payments and communications with your creditors on your behalf.
Call us today, we will review your current situation and then recommend the relevent debt advice and solution to manage your debts, all our advice is confidential and provided without obligation.
If a Debt Management Plan is the most appropriate solution to manage your debts, we will then discuss the plan with you and answer any questions you have, we can also send you an information pack.
Call us now in confidence to see if a Debt Management Plan is right for you. From a landline freephone 0800 083 1433, from a mobile it may be cheaper to call 01257 476415 or Ask us a Question
Video: What is a Debt Management Plan?
A Debt Free Direct Debt Management Plan has the following benefits:
- You pay a single monthly payment towards your debt
- We deal with your creditors for you
- Your new monthly repayments are negotiated and your creditors may agree to freeze interest
- A Debt Management Plan can help you to manage your unsecured debts
Like other debt solutions, a Debt Management Plan is complex and you need to be sure that it’s completely right for you. The best way to do that is to talk to us. Remember, our debt advice is provided in confidence and without obligation.
You should be aware there may be some areas of a DMP which may make it difficult for you. For example with a DMP there isn’t a guarantee that interest will be frozen and it can continue to build. See below for a list of the pros and cons of a DMP.
Debt Management Pros |
Debt Management Cons |
|---|---|
| Monthly payments are affordable to you | DMP’s are not legally binding |
| Interest can be frozen by your creditors | Creditor chasing can continue, but let us know and we will contact your creditors on your behalf |
| We will deal with all of your creditors for you | The total debt does not go away and is not written off |
| Your home is not affected by the arrangement |
A DMP can take a longer to complete than your original creditor agreement, however your monthly repayments will be reduced |
| You can call us for advice and support no matter what stage of the DMP you are in |
Your credit rating will be affected, although if you are already missing repayments your credit rating will have already been affected |
| You pay a monthly single payment | Interest can sometimes continue to build up |
Q: How quickly can Debt Free Direct get my DMP up and running?
A:When we have assesed that a Debt Management Plan is the most appropriate debt solution to manage your debts, we will explain the Debt Management Plan and answer any questions you have and then send you a Debt Management Pack. Once we receive your completed documentation and your first monthly instalment we will start communication with your creditors. Remember you can call us at any time to ask any questions and to discuss your debt management plan.
Debt Free Direct have experience in providing specialist advice and solutions since 1997 and are members of the Debt Management Standards Association who are regulated by the Office of Fair Trading.
Q: What documents do you require to set up my DMP?
A: We require your completed information pack including your signed Terms of business, signed authority to act, direct debit and up to date references and balances for all your creditors. Any supporting documents would be useful to ensure we have all the information to deal with your creditors on your behalf.
Q: What if my circumstances change when my DMP is up and running?
A: Every 12 months we will review your account and debt management plan free of charge to ensure you are getting the best from the Debt Management plan. We conduct this review and make any amendments to your affordability. If you do have a change in circumstances, our client Liaison officers are on hand to review your account and amend your payment plan.
Q: Will my creditors accept the reduced payment?
A: The creditors legally have to accept the payment we will send them on a monthly basis and cannot refuse a payment. It is at the creditors’ discretion if they decide to freeze interest and charges on the account. Our dedicated team of Client Liaison Officers are highly trained to negotiate regarding the interest and charges being applied to the accounts and keep you up to date on our results.
Q: Does the Debt Management plan affect my credit rating?
A: Any plan where you make a reduced payment from what was originally agreed will have an effect on your credit rating. Although, if you are behind on your repayments your credit rating will already have been affected.
