What is a Debt Management Plan?

A Debt Management Plan is an arrangement between you and your creditors to enable you to repay your debts with a regular payment you can afford. Debt Management Plans are not legally binding. A Debt Management plan is a debt solution for anyone who has unsecured debts that they can't afford to repay. A DMP requires you to have a surplus income each month (money left over after you have paid all of your living costs and household bills from your income) and owe money to more than one creditor.

Can I stop my DMP when I like?

You are, of course, free to stop the DMP at any time, but we ask that you provide notice so we can inform all of your creditors. If you are experiencing further financial problems and cannot afford the payments towards your DMP, then it may be possible to restructure the plan for you.

Please note: Once the plan is cancelled, creditors may resume interest and charges.

Who informs my creditors of the agreement?

Your creditors will be contacted if you enter into a DMP, and your situation will be explained with details of your income and expenditure and an offer of payment made to them. We have a great reputation with the creditors and deal with them often, this means you don't have to communicate with your creditors personally and helps to ease the stress involved.

Will my creditors agree to my payment?

Creditors don't actually have to agree to the payments in order for you to send them the money. You can only offer what you can afford and no more, the creditors know this but can use common phrases to try and get you to increase your payment. Due to working to realistic guidelines, many creditors accept our offers.

Is my credit rating affected?

If you are already in financial difficulty your credit rating is likely to have been affected already. Whenever the full contractual payment isn't made (even if the payment is just a few pounds short) it will still affect your credit rating as you are not complying with the credit agreement. We can help clear your debt quicker by getting interest and charges frozen, so your credit rating will be effected for a shorter period. A DMP will not show on you credit file.

Will I still receive calls and letters?

Unfortunately your creditors are still entitled to contact you directly so we cannot guarantee that all letters and phone calls will stop immediately, but we can get them down to a minimum and once the DMP is well established they should stop altogether. All correspondence you receive from your creditors whilst in a DMP arrangement should be sent to your case officer to deal with. (You will be provided with prepaid envelopes to do this).

How will I know my creditors are being paid?

Creditors occasionally say they haven't received a payment from your DMP payment, which is often untrue; they are just trying to get you to pay more. If you ever suspect your creditors aren't being paid you should get in touch with your case officer via their direct line or by emailing them.

What support do I get?

Our debt advisors pride themselves on giving excellent support to clients. Throughout your DMP arrangement you will have a case officer who will give you a direct number and an email address so you can keep in contact. If your financial situation changes you can talk to your case officer who will try and arrange a new plan for you. Staff are always there to give support and answer any questions you may have.

Can I continue to use credit?

We do ask clients not to obtain any more credit whilst in the DMP. It can be considered fraudulent if you take out credit when you know you can't repay it. The debt management plan will make sure you have enough money to live on, so you shouldn't need to take out any more credit. There are of course exceptions, such as a company credit card where you are not liable for the payments, but you should declare these to your case officer to avoid any problems.

Will interest and charges be frozen?

Creditors aren't obliged to freeze interest and charges but because we have a good reputation for establishing realistic and workable DMPs, the creditors are often more cooperative as they see that the debtor is making every effort to clear their outstanding debts. The creditors may look at your income and expenditure when deciding to freeze interest and charges.

What happens to my secured debt?

Your secured debts i.e. mortgage and car HP can't be included in a DMP, if you are unable to make the contractual payments to your secured debts you are at risk of losing the item to which the loan is secured on e.g. a car or house. We will ensure you include your secured debt repayments in your income and expenditure. You should never get into arrears with your secured debt and we strive to help you do this when you are in a DMP.

Is my home at risk?

No, a DMP is an alternative to bankruptcy and isn't legally binding so you won't lose your home if you continue to make the agreed payments into your DMP. It is always our priority to ensure that your property is not at risk and allowances will be made within your income and expenditure to keep up the payments on any mortgages or loans secured on your property. Providing you do this then there is no reason why your property should be at risk.