A debt management plan is also known as a DMP and is a peronalised solution to sort out any payment problems you may be suffering.  The plan is unique to your individual circumstances and takes into consideration your income, outgoings and current level of debt.  Only licensed credit counseling services are able to offer this financial management programme.

So What Does this Debt Management Plan Involve?

The counseling service will first of all ascertain your financial background and the circumstances surrounding why or how it is you got yourself into repayment difficulties.  However remember that a debt counseling agency is not there to judge you but to getter a better understanding of your overall financial situation.  Once this information has been collected a repayment plan can be put into place which would be affordable for you to make and acceptable for your creditors.  Do remember that a debt management plan does require a level of financial discipline and commitment from you if you are to discharge the debt in the quickest time possible.

An informal agreement is then put in place and the new revised offers of payment put forward to your creditors.  Once accepted the debt management plan will then allow you to repay your debts at through a single monthly payment you can afford and stop any creditors from hassling you as well as stopping or reducing interest and charges.

What to be Aware of When Entering into a DMP

Before entering into a DMP ensure you are fully aware of all the initial costs to set up the plan and what the management fee will be for the ongoing term of the plan.  In addition to this check any debts that cannot be included into the debt management plan as you will need to repay these debts yourself. 

Once the plan begins it is important to maintain your monthly payments and not to default on your plan else your creditors can terminate the reduced repayment plan and take further legal action so when agreeing the fixed monthly   payment ensure it is a realistic and affordable monthly payment for you to make and maintain for the duration of the plan.

A reputable debt management company will send out statements of all the payments being received and what payments are being made to your creditors so you know where you stand financially. As well as this an estimate of when you will become debt free should also be given.

Debt Plan Direct provide a national consumer debt counselling service providing full advice on all aspects of debt, budgeting and financial affiars.  Debt Plan Direct are one of the UK’s most prominent provders of debt management plans.