Debt Management Plan
What is a Debt Management Plan?
A Debt Management Plan (DMP) is an arrangement between a debt management firm and your creditors that enables you to settle your debts through regular fixed instalments.
How does it work?
Using your leftover income, after covering essential living expenses, you can use this amount to pay off your debts via a DMP.
You might be able to set up a DMP through a partner with a free DMP service provider.
Here’s the process:
- You make consistent payments to the debt management firm.
- The firm distributes the funds among your creditors.
Is a DMP right for me?
A DMP may be a good option if you can manage to make regular payments and can settle your debts within a reasonable period. Depending on your circumstances, there may be alternative methods for handling debt, such as bankruptcy, individual voluntary arrangements, or debt relief orders.
Interest and DMPs
With a DMP, creditors are not required to halt interest charges. However, the debt management company will try to negotiate with each creditor to stop interest and fees to prevent the debt from growing.
Are DMPs free?
Certain firms that provide DMP services may charge a monthly fee. However, you can obtain the same service without cost through the free DMP provider we work with or other free providers. If you are presently paying for a DMP, it might be advantageous to switch to a free provider.
Can I move to a free DMP?
If you are currently incurring charges for a DMP, you can transition to a free DMP provider. Doing so will ensure that all the payments you make each month are directed entirely towards paying down your debts.
