Debt Management Plans – A Guide
There are many different ways in which we can help you understand, manage and clear away your debt. Owing money in large amounts can be extremely stressful, and it is often important to seek help from certified debt management experts as soon as possible. As impartial advisors and assistants specialised in debt relief opportunities, our team are always happy to help anyone who may be struggling to repay creditors – no matter how much it is, and no matter how many lenders you may owe, we can be here for you when you need us. One of the most supportive options available to those struggling with debt in the UK is a Debt Management Plan, or DMP – a scheme which can help you to repay your debt to your lenders without red tape or fuss.
In Scotland, an equivalent solution exists to DMPs – the Debt Arrangement Scheme, or DAS – which exists to help educate and support those struggling with debt in repaying their creditors on a healthy basis.
Is a Debt Management Plan Right For Me?
Providing you are willing to repay your creditors – and that you are able to do so to some extent on a regular basis, than this informal scheme is ideal for your circumstances. A DMP will enable you to effectively propose a situation to certain creditors by which you agree to clear a certain amount of money with them per month – this may be offered in exchange for a ceasing of debt collection activity, or may even be pursued as an alternative to more drastic measures such as bankruptcy. Above all, while this method of debt management can be painstaking depending upon how much you owe and to how many creditors, it is important to remember that showing willing to pay – and at least breaking down some of the debt you owe without risk of further interest or fees – is half the battle.
When it comes to finding the right debt relief option for you, we will endeavour to discuss such details with you from our first consultation onwards. You can get help with debts from our team and we'd be happy to advise you on the best option for you. It’s important that we understand your financial situation, your potential to be able to make regular payments, and your relationship with your creditors. You can rest assured that our advice and support is always supplied on an impartial and completely independent basis – it is not our place to judge, only to advise and to support you through what can be an extremely stressful time. Millions of people fall into debt and can struggle to get out – but while you are no means alone, this does not mean that there isn’t a way to clear your slate and improve your credit rating for future purchases. Checking out Debt Management Plan reviews can help you find out if this will work for you.
What to Expect From a DMP
DMPs with our debt management advisors are fair, comprehensive and fairly priced. We will never over-charge for services that should come as standard – you are always able to consult with us for free on 0808 223 4188 – and should you wish to set up a DMP with us, we will of course let you know of any fees or payments that may be expected from you. Working on your behalf, we will be able to liaise directly with creditors, set up a debt management account and make payments through here to clear monthly repayments that may have been agreed. It’s also our job to ensure that we draw up and enrol you on a repayment plan that reflects your ability to repay and your existing situation – and we will of course ensure that you know the full ins and outs of such an arrangement before you are expected to sign any documentation.
A Debt Management Plan online can help you to organise the paying off of debt towards a wide range of different creditors and lenders. This means that you can use such a service to help pay off loans, money you may have physically borrowed from other people, store cards, credit cards and even bank overdrafts – but you will not be covered under this scheme for fines, tax arrears, utility bills, mortgage and rent, tax and VAT. These are known as ‘priority’ debts, and cannot therefore be attended to under such a scheme.
We will, again, be more than clear with you on what to expect from a DMP should you wish to discuss the potential for joining a scheme in the near future. Along with other debt relief options we may supply to you, we will take into account your current circumstances alongside your needs and debt situation. You can always rest assured that this information will always be treated with impartiality.
DMPs and Creditors
It is worth bearing in mind that creditors do not have to legally agree to accept any financial repayment proposals – but they do have to agree to accept repayments towards any debt you may have outstanding with them. However, we won’t be able to act on your behalf in terms of sending payments until a DMP has been officially set up. It is also worth bearing in mind that until such an arrangement has been set up with any creditors, debt collection activity may continue and this may mean that you continue to incur interest and/or further action taken against you. We will, of course, endeavour to legally set up plans with any creditors who may be pursuing you – and we will keep you informed each and every step of the way.
Other Things to Expect
DMPs are set up in mind of your ability to make repayments, and we therefore make sure that any plans you are registered on are completely applicable to your ability to repay on a regular basis. A DMP may require you to make payments to your creditors at a lesser rate – or it may require you to make payments towards a larger debt altogether – which can help to eat away at the total amount you owe. As standard, we may also require fees from you for certain associated services so that we may set up such a plan for you – and, once again, we will ensure that this is the right option for you to take based on your current ability to make payments – both to us and to any creditors. We can use a debt management plan calculator to work out what would be the best option for you.
Other Debt Solutions
There are, of course, several other options available to you which may be better suited to your circumstances and ability to make payments. While a DMP can work wonders for some people struggling to pay off debts to several creditors, other arrangements may offer less in the way of hassle or even long term effects, based entirely upon individual circumstances. Therefore, it is always worth discussing your debt with us in detail before we make any firm suggestions – and you never have to worry about discussing the finer points with us – we will always make sure that your data and situation are treated in the strictest of confidence. Here are a few of the other available options through which we may be able to support you:
In many cases Individual Voluntary Arrangements or IVAs offer a similar solution for those who may be paying several creditors at once. Through this scheme, you will be able to clear payments with a third party on a regular basis who can liaise with creditors on your behalf. This may also enable further debt action and even interest to be frozen – it is a route which is amongst our most recommended options for those learning to come to terms with debt.
For people living in Scotland there is the option of applying for a Trust Deed which can give a similar solution to an IVA. A specialist advisor can help you determine the terms of this agreement and make it as easy as possible for you.
You may want to look into an F&F Settlement which many people opt for. Proposals can be drafted to various creditors whereby you suggest that a lesser amount than the full payment owed can be offered. There are many circumstances through which such an arrangement can be agreed – and this is a very attractive option for many people who are looking to reduce the amount that they owe. This is an option we will offer to you as priority should we ascertain that it is applicable to your needs and circumstances.
There are Debt Arrangement Schemes available for anyone wanting a simpler way to manage their repayments. These are offered for people living in Scotland as an alternative to the DMP.
An option which lots of people choose is to Consolidate Debts into more manageable monthly repayments. This makes it less stressful than dealing with multiple lenders when paying back the money you owe.
In some cases people choose to Register for Bankruptcy as a way to wipe the slate clean. Otherwise known as Sequestration in Scotland, this form of debt settlement is often regarded as the final option for many people struggling to settle debts with creditors. We therefore normally only engage this type of discussion when all other avenues have been feasibly explored. While debt management solutions will generally all impact credit scoring in one way or another, this form of settlement can affect your ability to borrow and find credit in future for up to six years – meaning that it is a decision you should never enter into lightly.
More Debt Advice
We are always here for you if you are struggling to cope with certain debts and need advice on what to do next – offering advice and genuine avenues to help relieve the stresses and strains of debt management, let us discuss your situation in detail and propose a debt solution or plan to help you wipe the slate clean for good. Call us today on 0808 223 4188 or email us at your convenience, when you can.