When you are struggling with unmanageable debt finding the right solution is very important. The sooner you address your problems the easier this is likely to be.

However it is not always as simple as that. Some people may not realise quite how serious their debt problems are until relatively late on while others may try to ignore the problem.

If you have been struggling with your debts for some time and have already missed payments or if your creditors have already started taking legal action against you we explain whether a Debt Management Plan (DMP) is still a suitable solution for you to use.

When is a Debt Management Plan suitable?

A DMP is designed to help people who cannot afford their debt repayments as they are now but who can repay their debts over time in smaller instalments.

They are not suitable for people who can manage their existing arrangements, however, and they’re also not suitable for people who have no realistic chance of paying off their debts in full.

Do you want help to start a DMP? Give us a call on 0800 077 6180 or complete the form below to speak to one of our experts

Is it too late to start a DMP if my debts are already out of control?

This depends on what you mean by ‘out of control’. If you cannot afford your existing repayments but it looks like you’ll be able to repay your debts in full, you may well be able to arrange a DMP with your lenders.

But if your debts have come to the point where you simply won’t be able to repay them in full within a sensible period of time then you will probably need to consider an alternative debt solutions such as an Individual Voluntary Arrangement (IVA).

BMD Tip: If any of your creditors have already taken out a County Court Judgement (CCJ) against you it may be difficult to include this debt in a DMP because you cannot easily change the payment you are required to make towards it.

How do I start a Debt Management Plan?

There are two main ways you can start a DMP. Some people choose to arrange their plan themselves by speaking directly with their lenders, while others prefer to use a professional debt management company.

The advantage of using a debt management company is that they’ll do the work (negotiations, distribution of payments, ongoing administration) on your behalf so you don’t have to – and they’ll be there for you if you have any problems while the debt management plan is running.

Bear in mind that any debt solution can have consequences – it could damage your credit rating, for example, or mean you end up paying more in the long run.