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Debt Management Plan (DMP)

Debt Management may be the answer to your debt problems but, like all debt solutions, it depends on your financial circumstances. Read on to find out whether a Debt Management Plan is more appropriate for you than a Protected Trust Deed or other debt solution.

What is a Debt Management Plan?

A Debt Management Plan (DMP) is an informal arrangement put together by a debt management company. You agree to pay a regular amount each month to a debt management company which negotiates new debt repayments with the Creditors you owe money to; usually a lower repayment, but over a longer period of time.

There are two types of debt management companies:

  1. Commercial debt management companies
    Commercial debt management companies like Your Debt Expert charge a modest monthly administration fee to manage and distribute funds to your Creditors. Payments are based upon your monthly disposable income and what you can realistically afford.
  2. Charities which are funded by your Creditors
    These charities charge banks and lenders for operating the Debt Management Plan. Charities can take longer to set up plans than a commercial debt management company, which may increase your debts.

How does Debt Management work?

The debt management company will work with you to establish an affordable monthly repayment schedule. They will negotiate and deal with your Creditors on your behalf, and will request Creditors to freeze or reduce interest payments. Creditors will be paid monthly payments from the contributions you make on a pro-rata basis, and you will be sent regular statements and kept informed of any changes.

Why would you want a Debt Management Plan?

A Debt Management Plan may be the ideal solution to your debt problems if:
  • You want to clear your debts without a loan or remortgage
  • You have tried self-help plans in the past
  • You would prefer a debt expert to deal with your Creditors

Unlike a Protected Trust Deed, a Debt Management Plan is not a legally binding agreement and does not offer protection against Creditors. Call 0141 227 7730 for your best debt solution.

Advantages of a Debt Management Plan

  • Single interest free monthly payment for repayment of debts
  • Repayments are based on what you can afford
  • A flexible debt plan which can be reviewed if your circumstances change
  • Debt control without a loan or remortgage

Disadvantages of a Debt Management Plan

  • DMP is an informal agreement so creditors may continue to add interest and charges
  • DMP cannot stop any Creditor taking legal action against you
  • DMP will affect your credit rating

Find out if you qualify for debt relief




















  • Talk to an expert 0141 227 7730

Brought to you by Peter Dean

MA CA FCMI FABRP MCIArb MIPA

Peter Dean has helped thousands of people with quality money advice, through Your Debt Expert.

Peter Dean is one of the most highly-qualified and experienced debt solutions professionals in Scotland. He established Carrington Dean in 2001 following a distinguished financial career in which he became a Partner with one of the world’s leading accountancy firms and a recognised insolvency expert.

Peter is a Fellow of the Chartered Management Institute, a Fellow of the Association of Business Recovery Professionals, a Member of the Chartered Institute of Arbitrators, and a Member of the Insolvency Practitioners’ Association.

 

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Peter Dean