Debt Management

What is a Debt Management Plan?

​A Debt Management Plan (DMP) is an informal arrangement between you and your creditors which allows you to repay your debts, normally in full, at a rate that you can afford without relying on further borrowing. If during your DMP you are able to offer creditors a lump sum to settle your debts, it is possible to agree discounted settlements.

​Advantages and Disadvantages of a DMP

A debt management plan needs to very quickly get your debts under control and relieve the stress of debt but there needs to be a longer term plan to clear your debt.

Advantages
A Debt Management Plan is designed to allow you to pay what you can realistically afford to your creditors each month. Sometimes creditors will agree to accept reduced payments and freeze or reduce interest charges.

• It is a major benefit to have someone else liaise and deal with all your creditors and their correspondence. This includes dealing with phone calls, letters.  This takes away the stress of creditor interaction.
• If creditors agree to freeze interest and charges, a DMP can help you clear your debts in a reasonable period of time.
• If you’re struggling to meet your normal payments to creditors, a DMP allows you to pay an affordable monthly contribution
• A DMP is flexible. You can terminate or adjust your plan at any time.
• A DMP is an informal solution and should ideally provide for you to clear your debt in 2 to 10 years, depending on the size of your debt. If the plan looks like it could take more than 10 years, a DMP may not be appropriate unless you feel your circumstances are likely to change which will enable you to clear your debt in a 10 year period.
• We expect creditors to either stop further action to collect your debt or not to take such action. Our team are attentive and will work hard to ensure creditors do accept your plan.

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Disadvantages

• A DMP is an informal debt solution and creditors are not obliged to freeze interest and charges. Some creditors may agree to reduce interest charges rather than freeze them, others may not alter the interest charges or fees at all. Continued charges could result in it taking longer and costing you more to repay your debts.
• As a DMP is an informal arrangement, there are certain debts such as arrears of land tax which cannot be included due to the risk of action against your assets. 
• A DMP could have a negative impact on your credit file. Creditors can issue default notices which will remain on your credit file for 6 years. Your ability to obtain credit will be affected.
• You may from time to time receive an unwanted call from a creditor especially if they are using a debt recovery company. Politely tell them you are in a DMP and state our company name and your personal advisor. We will take care of the rest.
• We cannot guarantee that creditors will not take legal action or that they will stop collection activity. Such action could result in a judgment and could potentially lead to a charging order if you have a property.
• If you cancel your DMP, creditors could end payment arrangements previously agreed and charges could be reapplied to your debts, if they were frozen or reduced previously.

​What does the service cost?

Management Fee’s
The fees we charge we believe are fair and cover:-

• Review of your engagement pack and supporting documentation to ensure a DM plan is still appropriate
• Drafting your plan, sending this to creditors, chasing up responses and ultimately gaining creditors approval of your offer
• Dealing with creditors’ queries
• Monitoring your payments and distributing these to creditors within 5 working days of your DMP payment 

The fee we charge to cover our services is ranges between 5% to 15% of your monthly DMP payment. 
​During the first 6 months of your plan there may be an additional charge to the work of setting up your plan.
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Important Information
All debt solutions should be very carefully considered. Fees will be charged if a solution is taken in order for us to set up your plan and maintain it – all fees will be outlined during your consultation.

DON'T DELAY ANY LONGER, BOOK YOUR DEBT MANAGEMENT CONSULTATION:
Office: (246) 421-3328
Cell: (246) 233-3328
​Email: [email protected]