A debt management plan (DMP) is where you make reduced monthly payments towards your debts. It is one solution for people struggling to keep up with their contractual debt payments but who still have money available to pay towards their arrears after all essential living expenses.
In most cases the plan is arranged by a third party (eg, a debt help charity like StepChange Debt Charity) and they contact your creditors with a proposed schedule of reduced payments. If the creditors agree to the plan, you make one affordable payment to the third party every month, and they divide it between your creditors on your behalf.
In other cases you can manage your DMP yourself with support from experienced advisers. If you find yourself in debt, there is a wealth of good information freely available and many charities that are able to help you.
Online services are secure and offer immediate, personalised help. Some are available 24 hours a day.
Money Health check
The Money Advice Service have launched an online money planner which is designed to help everyone understand and manage their money better.
It takes about 10 minutes to answer some straightforward questions and the health check will give you a personalised action plan which identifies the top three things you can do to make the most of your money right now, and to plan for future goals.
It’s free and it’s unbiased – The Money Advice Service won’t recommend a particular product or provider or try to sell you anything.
Click here to take the health check now.
There are also informal forums & discussion boards where you can discuss your issues and get support from people who have been, or are going, through similar.
If you would rather have an experienced firm deal with your creditors and manage your payments for you there is a wide variety of charities and firms who can help you.
We have included some of the fee charging Debt Management Plan providers in the listings below for example of the fees and costs applicable when using these firms. The charges are far too often hidden amongst the Terms and Conditions and over on the LegalBeagles forum we have found a number of consumers had been paying into a DMP for a number of years unaware that a very large chunk of their payments were not going to their creditors at all.You should always check a Debt Management Company holds a current consumer credit licence and is regulated by the Financial Conduct Authority. You can check this here
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Citizens Advice Web Chat
Citizens Advice offers free, independent, confidential and impartial debt advice through their web chat service.
PayPlan’s online services include free, confidential online chat with debt help experts, a debt help request form, and a wealth of online resources.
StepChange Debt Charity
StepChange Debt Remedy provides you with the expert advice, budget support and solutions to help you manage your debts.
National Debtline offers free debt advice online through its My Money Steps tool and its web guides, fact sheets and sample letters.
Free debt counselling, debt adjusting and providing of credit information services is available by contacting the Money Advice Service.