What is it?
A Debt Management Plan (DMP) is co-ordinated by a specialist company on your behalf and provides a structured repayment schedule for your unsecured debts.
Can I apply for a DMP?
If you have 3 or more creditors and can afford to pay at least £100 per month towards your debts you could consider a DMP.
What are the benefits?
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You send one payment each month to your DMP company and they send the appropriate amount to each individual creditor
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The DMP company handle all communication with your creditors and they negotiate repayments on your behalf
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The DMP company will attempt to have interest frozen on your accounts
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Day to day control of your debts is passed to the DMP company
Are there any disadvantages?
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Unlike with an Individual Voluntary Arrangement, you do not have any court protection and dissatisfied creditors may still continue legal action against you
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Creditors may not freeze interest on your accounts
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There is no 'end date' to your debt problems. A DMP should be considered a short-term solution.
Note - An Individual Voluntary Arrangement solves each of these disadvantages
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