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Debt Management Plan

A typical Debt Management Plan (DMP) will consolidate all your unsecured debts into a single and more affordable monthly repayment.

In a Debt Management Plan (DMP), your debts are repaid to creditors on a pro-rata basis over an agreed period of time. This payment is determined by the amount you can reasonably afford after your normal cost of living has been deducted from your income, and will be presented to your creditors by a debt management company. Creditors are not obliged to agree to the Debt Management Plan, but they are more likely to accept it once they have been made properly aware of your true position.

Once your creditors have agreed to a DMP, it is your responsibility to continue paying the agreed payments to their administrator. The administrator (normally the debt management company who drafted the plan) will then ensure that these payments are distributed promptly, on a pro rata basis, to all creditors until the plan has been successful completed.

Each DMP should be regularly reviewed, especially to consider whether creditors would accept early settlement. Once a DMP is completed, you will be considered debt free and able to make a fresh financial start.

Please note that a Debt Management Plan may:

• Lead to increase in the sum to be repaid
• Lengthen the repayment period
• Additional fees or interest maybe charged by your creditors
• Your credit rating will be affected, if not already so.