Debt Management Plans Explained in 90 Seconds

January 2010

A Debt Management Plan or DMP is designed to take the financial pressure off you and your family by allowing us to act as your Debt Adviser and negotiate with all of your unsecured creditors.

So, how does a DMP work?

It's an agreement negotiated by us between you and the creditors you owe money to. We work out one monthly payment that you can reasonably afford, which will be distributed fairly to all your unsecured creditors. With a DMP you are, in effect, making a new promise to repay your debts in full.

As licensed debt adjusters we can manage your DMP for you, handling all future contact with your creditors and managing your monthly payments to them, or their appointed debt collector.

We can also, sometimes, negotiate full and final settlements with some of your creditors, where there are changes in your circumstances. And this might mean you could write off some of your outstanding debt.

So how do you set up a DMP?

Firstly, we need to know about all your income and outgoings. We do this with a document called a statement of affairs. And we can complete this with you in your own home or over the phone.

All our advisers are understanding, discrete and trained to prepare your statement-of-affairs in a format understood by your creditors, called the Common Financial Statement.

We'll then work out how much money you need for living expenses each month as well as your priority payments, including any arrears you may have. From what’s left we'll calculate what you can afford to pay to all your unsecured creditors.

We also have an expert legal support team who can help you deal with any court actions you may be facing, such as CCJs.

Once you've agreed with our calculations we make proposals to each of your creditors to arrange your new repayment schedule. We'll also see if they will freeze any interest and charges they're making on your debts. We have a very good record of doing this.

There’s a set-up fee for creating your DMP and then a monthly management fee. All you have to do is make your payment to us – from this, we pay each of your creditors and deduct our monthly management fee. And we send you a monthly statement so you know exactly who is getting what.

We offer a wide range of payment methods, including a Prepaid Current Account. And you'll have a Personal Case Manager throughout your DMP who will help you with any queries or advice whenever you need it. We'll also arrange regular reviews with you throughout your plan.

It couldn’t be simpler!

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