A Debt Management Plan (DMP) is an arrangement between yourself and your creditors which we will arrange and manage on your behalf. This allows you to pay one monthly payment to your creditors which is affordable and makes a provision for you to pay your priority bills such as your mortgage, rent, council tax, utility bills, etc
We will compose a budget with you which shows your household income and all your household expenditure.
This will demonstrate to your creditors what you can realistically afford to pay each month. Once accepted by your creditors we will take over the day to day running of your debts and deal with your creditors on your behalf. This arrangement can be on going for as long as it is necessary to pay your debts in full.
Advantages of a DMP:
- You pay one monthly payment and this is distributed on a pro-rata basis to your creditors.
- Interest and charges are often frozen, so the debt doesn't increase.
- You only pay what you can afford, based on your incomings and outgoings.
- You will no longer need to negotiate with your creditors alone.
Disadvantages of a DMP:
- It isn't legally binding, so creditors can proceed with court action (Debtfocus will do everything in their power to stop this or come to an agreement through the courts)
- If you are only making a small monthly payment and have a high level of debt, it could take several years to clear your debt.
