Debt Management Assistance Plans, How do they work

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A debt management plan is a structured proposal, which on agreement from your creditors will provide a debt solution for all your troubles.

Negotiations are conducted between a specialist team and your creditors to alter your debt repayment terms according to as much as you can afford, providing a very good solution, in particular for short term problems.

After all your priority debts are considered, such as mortgage repayments and utilities, as well as accounting for general living expenses, any further disposable income is deposited into one single monthly payment and distributed to non-priority creditors on your behalf, providing a very simple and effective way of repayment without all the hassle there normally would be.

Your income and expenditure will also normally be periodically reviewed by one of our team. If your circumstances improve, it may be necessary to alter your agreement by increasing your payments, thereby shortening the life of your debt management plan.

If on the other hand, your circumstances unfortunately worsen , we may renegotiate the terms of your plan to make payments more realistic and affordable.

A debt management plan will be good for you as an alternative to bankruptcy and sometimes an IVA especially if your problem is temporary and likely to improve.

If you don't qualify for an IVA, which means having debts of under £12000, a DMP will probably be the best solution.

It is a better alternative to bankruptcy for most cases, for a number of reasons, the main being that filing for bankruptcy can be a big negative on your credit report and have a disadvantaegous future impact. Bankruptcy will remain on your report for either 7 or 10 years depending on which you file for, whereas a DMP will be removed as soon as you exit the plan.