The Debt Counsellors provides free debt management plans (DMP).
You will not pay any fees for your DMP and unlike some charities we don’t ask creditors to make a contribution through what is called a Fair Share Contribution Scheme.
What is a DMP?
A DMP is an informal agreement between you and your creditors for paying back your non-priority debts. Non-priority debts are things like credit cards, loans and store cards.
You pay back the debt by one set monthly payment, which is divided between your creditors.
Most DMPs are managed by a DMP provider who deals with your creditors for you. This means you don’t need to deal with your creditors yourself.
A DMP is not legally binding, meaning you’re not tied in for a minimum period and can cancel it at any time.
Is a DMP right for you?
A DMP may be a good option if the following apply to you:
- you can afford the monthly repayments on your priority debts (such as mortgage, rent and council tax) and your living costs, but are struggling to keep up with your non priority debts such as credit cards and unsecured loans
- you’d like someone to deal with your creditors for you and send your repayments to them on your behalf very month
- making one set monthly payment will help you to budget.
Qualifying for a DMP
In order to qualify for a Debt Management Plan you will need:
- to be able to pay each of your non priority creditors at least one pound a month
- have at least 2 unsecured non priority debts
The DMP impact
You need to be sure you understand the impact a DMP will have:
- it may take longer to pay back your debt because you’ll be paying less each month
- your creditors won’t necessarily freeze the interest and charges on your debts, so the amount you owe might go down by less than you think
- some of your creditors might refuse to co-operate or continue to contact you at least in the short term
- If you miss payments on a credit debt, this will be recorded on your credit reference file by your creditor whether or not you then set up a DMP. This will usually make it harder for you to get credit. Some creditors may also ask for a note to be put on your credit reference file to say you are on a DMP.
The Debt Counsellors can assess if a Debt Management Plan is the right solution for your debt problems. For more information please call us today on 0300 456 2726