What is a Debt Management Plan?
A Debt Management Plan, also called a DMP, is a highly effective debt management solution that enables you to get your finances back on track while you continue to repay your creditors – the companies you owe money to.
Debt Management Plans work by consolidating your unsecured debts into one manageable monthly payment.
If you’re having difficulty meeting repayments on your unsecured debts, we could speak directly with your creditors and negotiate a more affordable repayment rate on your behalf.
If your creditors agree, all you need to do is make a payment to us every month and we’ll distribute it to the companies included in the DMP.
Applying for a Debt Management Plan
A Debt Management Plan is available to those who meet the following criteria:
- Two or more creditors
- Unsecured debts over £2,000
- A minimum disposable income of £80
- Proof of income
Handling debt may seem like a daunting task, but with the right debt help and advice, you can work towards a future free of debt.
For comprehensive DMP information and to find out if a DMP solution is the most suitable option for you, speak to our expert advisors on 0800 096 1331.
How Baines & Ernst could help you
A Debt Management Plan is an informal agreement with your creditors that can help you handle your debts effectively while you get your finances back in order.
At Baines & Ernst, we have more than 10 years’ experience in helping people take control of their debt problems, and we could help you too.
We have forged excellent relationships with over 3,000 UK creditors – putting us in a strong position to negotiate more affordable repayment rates on your behalf. What’s more, in the majority of cases we are able to freeze interest and charges.
A DMP provides you with the opportunity to manage your unsecured debts and repay creditors at a rate you can afford. If you repay your debts at a reduced rate, you will extend the period in which you repay your creditors, but you’ll be clearing debts at a speed that’s comfortable for you.
Take a look at our frequently asked DMP questions, on our FAQ page. Alternatively, call us on 0800 096 1331 to speak to an expert member of our team.
Key Information and Fees – Debt Management Plan (DMP)
At Baines and Ernst we’re committed to providing the highest standards of customer service at competitive rates. For information on our fees for our full range of services, please click here.
When you first apply for a Debt Management Plan (DMP), you will pay an initial fee to us for negotiating with your creditors and for managing the distribution of your monthly payments. This initial fee is paid before any payments are paid to your creditors, therefore you may fall behind (or further behind) with your creditors. This stage of the DMP will result in you not making the contractual repayments on your unsecured debts and will affect your credit rating in the medium to long term; however you can continue to make token payments to you creditors during this period if you wish.
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 after you complete the plan.
Please note that due to lower repayments under the DMP, 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.
Although you may become debt free at the end of the DMP period, if a Default Notice has been issued, it will still appear on your credit record for 6 years.
In line with the Consumer Protection (Distance Selling) Regulations 2000, you may cancel the DMP at any time. You will also have a cooling off period of seven working days from when the forms are signed and returned to us, 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, including utility bills and council tax payments. Baines and Ernst will take these payments into account when we work out your disposable income in the DMP.
You can also view a free publication from The Insolvency Service ‘In Debt? Dealing With Your Creditors’ which provides an overview of some of the debt solutions that may be available to you.
Baines and Ernst Ltd