Debt Management Plans (DMP)
Debt Management Plans (DMP)
If you are having difficulty repaying your creditors every month, a Debt Management Plan (DMP) from Baines & Ernst
could help – you may be able to consolidate and reduce your repayments, so that coping with them is much easier.
Bankruptcy is not your only choice if you have debt problems. If you’re struggling to get by, or if you have reason to
expect a change in your financial situation soon, a Baines & Ernst Debt Management Plan could be your ideal solution.
With a DMP from Baines & Ernst - you simply make one
affordable payment to us every month which we distribute to your creditors on your behalf.
Effective Debt Management
Our experience in debt management means we have developed long-standing relationships with a multitude of
established creditors, such that our Debt Management Plans can often help to freeze or reduce interest and other
additional charges, unlike many other debt consolidation services - though this cannot be guaranteed. Furthermore,
your Debt Management Plan can be adjusted (or even cancelled) at any time – without penalty – just as your
circumstances may change.
DMP Criteria
What are the criteria for a Debt Management Plan?
• 2 or more creditors
• Over £5000 of debt
• A minimum disposable income of £100
• Proof of income
We consolidate your debt repayments into a single, affordable monthly payment, so that you have less going out each month, though if your creditors do not freeze or reduce interest and charges, this will lead to an increase in the time to pay off your debts and total amount repaid.
Your credit rating and ability to obtain credit will be affected in the short term, and possibly in the medium to long term though your credit rating may already be affected if you have missed or made late payments. To get advice on Debt Management Plans to suit you, call us on 0800 096 1331.
For more information on Debt Management Plans, view our FAQs or call us (free) on 0800 096 1331. Our team will regularly assess your payments to your DMP so that if a more suitable, alternative debt solution subsequently becomes available, we can tell you about it. You can then make an informed decision as to your continued progress.
Our initial advice on Debt Management Plans is completely free. Fees may apply thereafter depending upon the debt solution entered into. Details of the costs and Key Information relating to the Debt Management Plan can be seen below and will also be notified to you in advance.
Fees & Key Information
Fees relating to Debt Management Plans are in two parts (a personal fee estimate will be provided to you prior to entering into any agreement):
1. Initial Fee - this is calculated from the financial information provided to us in the application process and is equivalent to the first two months payment to the plan plus a £70 administration fee. It will be used to cover our initial costs in collecting and reviewing your documentation, for setting up your monthly payment plan and for our professional services in liaising with your creditors. The Initial Fee is retained by us and will not be distributed to your creditors and can be paid in two separate installments.
2. Monthly Management Fee – this is the Fee payable for our Services each month and is to cover the cost of administering payments to creditors, dealing with queries from them and providing our professional services to you. It is an amount equal to 17.625% of your Monthly Payment (apart from your first two Monthly Payments which is the Initial Fee), subject to a minimum fee of £35 and a maximum fee of £100.
Please note that due to lower payments under the Debt Management Plan, unless your creditors agree to freeze or reduce interest and other charges (which they are not obliged to do) then there will be an increase in the total amount of debt to be repaid and the time taken to pay off the debts.
When you first apply for your monthly payment plan and pay your Initial Fee and prior to your first payment being made to your monthly payment plan by you for distribution to your creditors, you may fall behind (or further behind) with your creditors. Because taking out a plan will result in you not making the contractual repayments on your unsecured debts, you should expect that your credit rating will be adversely affected in the short term and possibly in the medium to long term. However, your credit rating may already be affected if you have arrears or a history of missed or late payments. A record of your agreement with us will be held on your credit file for up to six years.
Although you may become debt free at the end of the DMP period, if a default notice has been issued the effect is likely to remain on your credit record for 6 years.
In line with the Consumer Protection (Distance Selling) Regulations 2000 you may cancel the Plan at any time. You will also have a cooling off period of seven working days from the date the Plan commences, during which you may cancel in writing and receive a refund of the initial fee paid to us.
You must make sure that you continue to make your payments in full towards any mortgage, other secured loans, your utility bills and Council Tax payments. However, we will take these payments into account when we work out your disposable income in the monthly payment plan.
‘If your circumstances change in the future, please contact us to discuss your situation in order that we can help ensure you have the right solution for your circumstances. You can also view a free publication from The Insolvency Service ‘In Debt? Dealing With Your Creditors’ (www.insolvency.gov.uk/pdfs/guidanceleafletspdf/indebt-web.pdf. ) which provides an overview of some of the debt solutions that may be available’