Oxford Mail

Is a Debt Management Plan (DMP) right for me?

Yes, if you are satisfied that you could repay your debts in less than five years if your creditors agreed to freeze interest and stop charges.

• Yes, if your financial circumstances are temporary, perhaps due to unemployment or a short/medium sickness which is stopping you from working.
• Yes, if your debt level is below £15,000 and you are struggling to pay your monthly commitments.
• If you can't pay off your debts in less than five years, you may be better off with an Individual Voluntary Arrangement (IVA).

A Debt Management Plan (DMP), allows you to repay your creditors on a pro-rata basis over an agreed period of time. Your monthly payment is calculated by deducting your normal living expenses from your income, and will be presented to your creditors by a debt management company. Because a Debt Management Plan (DMP) is an informal arrangement your creditors are not obliged to agree to your payment proposition, but they are more likely to accept it once they have been made properly aware of your true financial position. Once your creditors have agreed to your Debt Management Plan (DMP), it is your responsibility to continue paying the agreed monthly repayments to the Debt Management Plan's (DMP's) administrator. The Debt Management Plan's (DMP's) administrator, which is normally the debt management company who drafted the plan, will then ensure that these payments are distributed promptly to all your creditors on a pro rata basis, until the plan has been successful completed. Each Debt

Management Plan (DMP) should be regularly reviewed, especially to consider whether creditors would accept early settlement. Once a Debt Management Plan (DMP) is completed, you will be debt free and able to make a fresh financial start. Before you take out a Debt Management Plan (DMP), make sure that you use a fully licensed debt management company that adheres to the DTi's debt management guidelines. It is important to establish any charges that you may have to pay for a debt management company's services.

Also, ask to see evidence that they are trying to, or have already secured a freeze on all charges and interest made by the creditors and make sure that this continues throughout your Debt Management Plan (DMP).

Call free on 0800 088 7502 to find out more or get help with applying for a Debt Management Plan (DMP) by filling in the form below.