Debt Management Plan Advice

Worried about mounting debts and want to know if a debt management plan could help you? Read our practical debt management plan advice below to find out.

Debt Management Plan Advice

You might have a lot of small debts spread across different credit cards, maybe a few unpaid bills or bank loans that are starting to mount up? Debt Management Plans are a great way of gaining control over your finances again.

What is a debt management plan?

A debt management plan (DMP) is a payment scheme set up for you by a third party - a debt management company - which allows you to pay off your debts in a structured way.

This is a really good solution if you have a lot of smaller debts to worry about, because once you have signed the agreement with your debt management company, you will only have one monthly bill - which is paid to them - to cover all the debts you owe.

How do I set up a debt management plan?

To arrange a debt management plan, your case needs to be put forward to a debt management company, showing you can no longer afford to meet the original requirements of your debts. Once agreed, the company will liaise with your creditors on your behalf, to try and reduce your interest payments, or clear them altogether.

The debt management company can also help decrease the total amount you owe and sometimes influence the term in which you need to pay back your debts. From this point you will pay your debt management plan an agreed fee every month which will be used to pay your creditors for you.

What are the costs?

Your monthly repayments are guaranteed to be cheaper when you sign up to a debt management plan, however be aware that you will be expected to pay admin and set up fees which can be expensive. It might take you longer to clear all of your debts when choosing this kind of solution because you are paying back what you owe in smaller amounts.

Debt management companies only help you control non-priority debts such as: credit card & catalogue payments, bank loans or money you have borrowed from personal contacts.

Other ways of coping with debt:

• Personal Loans
• Individual Voluntary Agreement

Everyone's situation is different, so why not simply call us now on 0800 011 4637, where our financial advisors are on hand to answer all your questions. We will help you make the right decision about a suitable debt management solution and put you in touch with the best possible contacts so you can gain control of your finances again.