How Does a Debt Management Plan Work?
The process is a particularly easy one. After we’ve gone through all the information about you and your financial situation and you’ve decided its the right solution, you can sit back and relax whilst the firm works on bettering your current position and giving you peace of mind the payment are in line with what you can actually afford.
1. Our in-house Money Advice expert will review your current financial situation
2. Ome company, one opayment
Don’t worry about having to contact your lender to inform them about this potential change in repayments. After securing a good understanding of your finances DMP provider will contact your creditor to not only notify them of your monetary situation but to ask them to reduce your repayment amount, and to temporarily suspend any additional interest or charges. Your creditors are not under any agreement to oblige to these reductions, but the firm will do everything in their power to present to them why it’s the right thing to do by simply explaining the difficulty you face from the unaffordable payments.
3. And Relax
With a payment plan agreed with your lender, your Debt Management Plan will be activated, meaning your direct debit is reduced and you’re able to live comfortably all whilst your debt is being paid at an amount that suits you. To see if you qualify for an IVA today and get more information on a debt management plan today, click here to contact one of our MoneyAdvice professionals.
But what is a Debt Management Plan?
Here at MoneyAdvice, we’re aware life can have its ups and downs, just like your financial situation. It might be the case that you are no longer in the position to repay at the previously agreed amount. Getting help via a Debt Management Plan allows you to seek professional, expert guidance and not only organise but adapt your current repayment scheme to your current financial position.
A Debt Management Plan is there to provide a solution – overhauling your originally agreed payment plan so once again it’s easy, affordable and stress-free. Backed by their experience and expertise in the industry, through Money Advice’s financial review, organisation, and contact with the original lender, you are again able to repay your debt at your own pace and at an amount that you can afford. It doesn’t get rid of your debt quicker or doesn’t cost any less, but it relieves pressure and allows you to go and live a life – and that’s what truly matters.
All Debt Management Plans are subject to eligibility and acceptance.
Affects to Your Credit Score
Being on a Debt Management Plan does have a knock-on effect on your credit score. But with that said, the DMP is not a secured contract – you can leave and return to your original payments at any time. Plus, as a DMP is not a credited solution to debt, your details do not appear on the Insolvency Register.
During your DMP, the firm will pay your lenders on a monthly (or every 4 weeks) basis, and will only send the payment when they have received the amount in full. So, if in your situation means you can only pay weekly or fortnightly, it may be that you fall into arrears due to late or overdue payments. If this is the case, it may be a good idea to look into other ways you can manage your debt. Click here to find your Debt Solution.