There are different ways you can apply for a Debt Management Plan (DMP). These depend on whether you want to negotiate it yourself or get help.
Want to start a DMP? Give us a call (0800 077 6180) or complete the form below to speak to one of our experts
Negotiate a Debt Management Plan Yourself
A Debt Management Plan is an informal agreement with your creditors. Because of this there is nothing to stop you negotiating with them and then managing the Plan yourself.
You will need to create an income and expenditure budget to prove how much money you can afford to pay towards your debts each month. This must then need to be divided between your creditors (normally on a pro rata basis).
You then write them explaining your situation and with your offer of payment. You are responsible for maintaining the payments regularly each month.
Self managing a Debt Management Plan takes time and organisation. If you are concerned about this you may be better off getting help to implement your Plan.
Use a Free Debt Management Plan Service
If you do not want to manage the Plan yourself there are organisations such as the debt charity Step Change who can help you for free. This option might be ideal if you are concerned about negotiating with your creditors.
Once the plan is in place you make a single payment each month. This is distributed between your creditors on your behalf.
You therefore have the simplicity of making a single monthly payment into your plan. In addition all of the money you pay in goes towards repaying your debt.
Free debt management service providers such as Step Change tend to be very large organisations. If you are looking for a more personal service they may not be for you.
When to use a Commercial Company to set up your Debt Management Plan
In certain situations a free debt management service may not be available to you. If you are self employed it is unlikely that Step Change will be able to help.
If you have moved abroad or are likely to move in the near future there is nothing to stop you using a Debt Management Plan to manage your debts in the UK. However again Step Change will not be able to help.
Given these circumstances if you do not want to negotiate with your creditors yourself you will need to use a commerical company. You will be charged a fee but will generally get a more personal service.
If you are Self employed or living outside of the UK speak to us about starting a Debt Management Plan with a commerical provider.
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