Consider a DMP If you are…
- £2,000 or More in Debt?
- Struggling to keep up with your debt payments?
A Debt Management Plan (DMP) may hold the key to your debt-free future & could freeze all interest and charges.
Money Advice is here to help so start by using our 30-second online form to see if you qualify today.
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A brief introduction to DMP(Debt Management Plans).
A debt management plan, also known as a DMP, is an informal debt solution designed to lower your monthly payments towards your unsecured debts.
It isn’t legally binding, unlike other debt solutions, such as an Individual Voluntary Arrangement (IVA) or a Trust Deed.
Money Advice’s can give you all the information you need to decide if a DMP is the right solution for you.
A Debt Management Plan can help ease the pressure of tight deadlines and repayments that don’t fit within your financial situation. Using Debt Management Plan can:
- Adapt your previously agreed payments to an amount that suits you
- Relieve stress by putting your finances in the hands of professionals
- Relive pressure by handling contact with the original lender
Leaving you to enjoy the things you love to do whilst paying your debt at a rate that is affordable to you.
Why a Debt Management Plan?
Individual to You
The new amount you will pay to your lender is concluded from a thorough review of your monthly income and expenditure. This guarantees that it will be affordable for you and allow you to live at ease whilst paying what you owe.
Set Up within a Month
On average, a Debt Management Plan takes 30 days to be implemented to your repayments. This may be extended due to potential complications with your lenders, but that is something for us to worry about – so you can still sit back, relax and let us get the best outcome for you.
The Debt Gets Paid
Ultimately, the plan allows you to reach the goal of fully repaying your debt, whilst you’re still able to afford the essentials. Allowing you to live your life with some of that pressure lifted off of you.
You’re Left at Ease
Everyone needs a helping hand sometimes, and we will do everything in our power to ensure that you can live happily and reassured whilst your debt is being paid at an amount that has been adapted to you. And if your situation changes and you are no longer in need of a reduced payment, the DMP is not a secured contract – you can return to your original payments at any time. To start the process today, click here to contact one of our MoneyAdvice professionals.
Let's get started
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 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.
DMPs are available subject to eligibility and acceptance, alternative solutions may be offered. Fees payable if continuing service are provided. Money Advice Ltd may receive a fee for passing your information onto carefully selected third parties should you decide to use any of their services. To find out more about managing your money and getting free debt advice, visit Money Helper, an independent service set up to help people manage their money.
*All Debt Management Plans are subject to eligibility and acceptance.
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.
How Does a Debt Management Plan Work?
Our in-house Money Advice expert will review your current financial situation
How Does a Debt Management Plan Work?
One company, one payment
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.
How Does a Debt Management Plan Work?
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 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, please contact one of our MoneyAdvice professionals.
A Step by Step Guide to the DMP Process
Discuss your situation with one of our MoneyAdvice Experts
After discussing your circumstances with one of our experts, they will then explore your options that coincide with your specific financial situations; deciphering whether a DMP is the right route for you.
Your Proposed Plan
If we conclude that a DMP is a right route for you, we will pass you onto a third party who will help construct a bespoke proposal which includes the reduced payment amount and the rate in which you pay it. If you are in agreement, you will have the chance to read through your plan to ensure you understand and agree with everything that we have proposed. This is when you can sign.
Your information will be presented to your original lenders with the signed LOA (letter of authority) for the firm to deal with the debt on your behalf. Once they are in agreement, the DMP plan can be put into effect.
Your reduced repayments will kick into gear, and you will be able to pay back the money you owe at an amount that suits you, all whilst living life not ruled by your debt. You can afford life’s essentials, and get closer and closer to paying your debt in full. Whilst the interest and charges are requested to be frozen this is never a guarantee but more than likely if the debt repayments are more than what you can realistically afford. Fees are payable with debt management but we will calculate your debt repayment without fees to conclude if another solution can discharge you sooner than 10 years.
- You only pay what you can afford and this amount can change if your circumstances do.
- A 3rd Party Company can handle the Debt Management Plan for you and deal directly with your creditors for you.
- You can cancel the plan at any time you wish.
- All your eligible debts can be consolidated into one monthly payment.
- It’s possible that some creditors may freeze interest, as well as reduce repayment amounts.
- Your creditors can cancel at any time and there is no obligation for them to agree to the plan.
- A Debt Management Plan may have a negative impact on your credit file – this may make it difficult for you to apply for credit whilst on the plan, as well as for a period of time after.
- 3rd Party Companies handling your Debt Management Plan may charge a fee.
Debt Management Plans (DMP) FAQ
You can only include ‘non-priority’ debts in a Debt Management Plan.
Some examples of non-priority debts you can include in a Debt Management Plan are:
- Credit Card debts
- Payday Loans
- Personal loans
- Benefits overpayments
- Store Credit / Cards
Some examples of priority debts that you can not include in a Debt Management Plan are:
- Council Tax
- Utility Bills
- Mortgage or Rent Arrears
- Court Fines
- Child Support
- Court Fines
- National Insurance
- TV Licence Arrears
This is a solution for customers with a regular income but who doesn’t have enough free cash to meet their debt obligations. It is an informal arrangement, where the customers’ debts are managed on their behalf. It takes away the stress for the customer of dealing directly with the creditors. Click here to find you if you qualify for Debt Solution.
It’s crucial that you do make an informed decision – every situation is different, and you’ll need to choose the path that feels right for you personally. Debt Management Plan may be a suitable choice for you if the following circumstances apply:
- You have £2000 of eligible debt.
- You would like a 3rd Party to deal with your debts on your behalf and negotiate with your creditors and if so, are able to pay any necessary fees that these companies charge.
- You can afford monthly payments towards your creditors.
- You can still afford to pay towards your bills and any debts that aren’t included in the Debt Management Plan.
- You would like an informal arrangement which you can cancel at any time
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 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.
Being on a Debt Management Plan or reducing payments directly 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 formal solution to debt so your details do not appear on the Insolvency Register.
Your creditors can take legal action if you do not make payments of the agreed amount or on the agreed dates made between you and the lenders.
Your monthly payments can include multiple debts in one
Monthly payments are manageable and affordable based on what money you have, you won’t need to take out more loans in order to pay off your debts.
Once you enter into a DMP, we can request to freeze your interest and charges and also for contact from your creditors to stop.
It is best to speak to one of our Senior Advisors to determine which debt solution is right for you. A DMP could be appropriate if you don’t want to take out any loans to clear your debts or if your current monthly payments need reducing as they are unaffordable.
Based on the amount you owe to your lenders and your monthly income, we can determine what is affordable for you to pay per month.
When we know this, we can request that your creditors accept a lower payment to clear your debts and that your interest is frozen. Then one monthly payment is made and distributed to your creditors.
The end of your DMP depends on the amount you pay back per month. Also, if your creditors agree to reduce interests and charges, the time period of the DMP can be reduced greatly.