A Debt Management Plan (DMP) is designed to help anyone who may be struggling or in arrears with money they have borrowed. Any debts which are managed through a DMP will ultimately be paid off in full providing payments are maintained throughout its lifetime.
Payments in a DMP are normally calculated on what you can afford and not on what you owe. Charges and interest may be frozen or reduced but this will depend on your creditor. Payments to creditors may be reduced, which could in turn increase the length of time taken to repay outstanding debts or arrears to creditors.
Any communication you receive from creditors included on a DMP is normally managed by your DMP provider.
When we review your finances and conclude your monthly ‘disposable income’ you will need to have at least £80 to be considered for a DMP.
There are some debts which are excluded from a DMP. These include fines, tax, student loans, current council tax, selected benefits, gas and electric utilities arrears and child support.
We can, depending on circumstances, also include social fund loans within a DMP. Only unsecured debts can be included on a DMP.
Managing debts through a DMP will have a negative impact on your credit score as you won’t have maintained contractual payments with your creditors once your debts are managed via a DMP.
A credit report may uncover debts being managed through a DMP. The time this will remain on your credit file for will vary based on how long the DMP lasts. On a DMP your creditors will normally send correspondence to the firm managing the plan. If you miss or make late repayments then your creditors may contact you directly to discuss it further.
If you try to obtain credit in the future it may be at a less competitive rate, or at an above average rate, because of the impact a DMP will have on your credit score.
The process begins with a review of your financial income and expenditure. This is normally done by a licensed debt management company.
Once completed they will have an idea of what you can pay towards your existing debts. This is after you have paid essential bills such as rent or mortgage, utilities and council tax. They will hold discussions and negotiate with your creditors with a view to reducing monthly payments which, if successful, may increase the length of time taken to repay what you owe to your creditors.
Finance Lead Tech Limited T/A Assist My Finances, registered office 83 Stockport Road, Denton, MANCHESTER, M34 6DD.
Co Number: 09446694. Registered in England and Wales.
DPA No: ZA101225.
Finance Lead Tech Limited T/A Assist My Finances are an Appointed Representative of Sterling Green LTD who are authorised under the Financial Conduct Authority under registration number 808320. Finance Lead Tech Limited T/A Assist My Finances do not directly provide solutions. We offer no obligation referrals to trusted providers of appropriate solutions and receive a fee from these providers if you choose to proceed with the solution. Free and Impartial advice, debt counselling, debt adjustment and credit information services are available from the Money Advice Service and you can find out more by contacting them. The solutions on this page are not available if you reside in Scotland.