Debt Management Plans

Debt Management Plan

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A Debt Management Plan (DMP) in an informal arrangement between you and your creditors for the repayment of your outstanding, unsecured debt.

Debt Management Plans do not involve a reduction in the amount of debt — the arrangement reached allows you to make reduced payments over a period of time.

Debt Management Plans are not legally binding so it provides you with greater flexibility in that you can end the arrangement and revert back to paying your original payments if your financial situation improves.

Similarly, your creditors can also end the arrangement any time they choose. This does introduce a level of insecurity, but should you choose to hire the services of a debt management company to negotiate with your creditors, it can ensure that the Debt Management Plan reaches its logical conclusion and that your interests are not compromised.

Some companies charge fees for Debt Management Plans however DebtManagement.eu.com as part of ClearStart UK Limited pays 100% of your contributions to lenders and we even pay the last two contributions for you.

These are the best terms in the UK – not even charities can match them.

How can a Debt Management Plan be set up?

Involuntary DMP: A County Court may issue you an order for setting up a Debt Management Plan. Needless to say, this occurs when one or more of your creditors files a ‘failure to pay’ complaint with the court.

Voluntary DMP: You can directly approach your creditors for renegotiating the terms of the loan so that you can make lower monthly payments over an extended period of time. Although a DMP is not legally binding, you are obligated to honour the arrangement, failing which your creditors can file for non-payment through County Court.

Through a debt management company: This is by far the most popular method of entering into a Debt Management Plan and there are many advantages of seeking the services of a debt management agency.

First, debt advice companies have the right contacts with the lending companies and can effectively negotiate on your behalf.

Secondly, you may not be aware of the legal and financial implications involved so professional help can ensure that your interests are met.

As part of the deal, a debt management company would negotiate with your creditors on your behalf for a lower monthly payment over an extended period of time. Once the DMP becomes applicable you would be required to make the detailed payments to the company, who would then distribute it to your creditors.

To learn more about bankruptcy and other debt solutions call our advisors on 0800 9546 205. Alternatively, request a call back and we'll advise which debt solution is best suited to permanently manage your debts.

(Calls from mobiles and other networks to 0800 numbers may incur a charge. When you speak to us about your debt problem, ask us to call you back so that you do not have to pay for the call)

Please note that Debt Management Plans may:

Lead to an increase in the sum to be repaid
Lengthen the repayment period
Additional fees or interest may be charged by your creditors
Credit rating may be effected if not already so

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