Debt Management Plan
We have a wide range of debt management solutions. Talk with our advisor about the best debt management plan according to your financial situation.
What is a Debt Management Plan (DMP)
A Debt Management Plan (DMP) is a way to pay off unsecured debts at an affordable monthly rate. It’s not something you have to do, but if you want to speed up the process of paying off your debt and consolidate it into one manageable payment, this is the best option for you. It is an agreement, negotiated by you or a third party, to lowest your monthly payments to your creditors.
If you are struggling with debt, a debt management plan (DMP) may be one option to consider. A debt management plan is a repayment plan that allows you to pay off your debts in monthly installments over a period of time. This can be a useful option if you are having difficulty making the minimum payments on your debts, or if you are being charged high interest rates that make it difficult to pay off your debts.
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Which debts can pay off with a Debt Management Plan?
You can only use a Debt Management Plan for non-priority debts.
These include:
- personal loans
- bank or building society loans
- catalogue, home credit or in-store credit debts.
- credit card, store card debts or payday loans
- overdrafts
- money borrowed from friends or family
Which debts can’t pay off with a Debt Management Plan?
You can not apply for a Debt Management Plan to pay off priority debts.
- Court fines
- TV Licence
- Council Tax
- Gas and electricity bills
- Child support and maintenance
- Income Tax, National Insurance and VAT
- Mortgage, rent and any loans secured against your home
- Hire purchase agreements, if what you’re buying with them is essential.
Am I eligible for a Debt Management Plan (DMP) and Is a Debt Management Plan right for me?
A common question that many people ask these days: Is the Debt Management Plan the right solution for me? And am I eligible for it? A Debt Management Plan may be an excellent idea for you entirely relies on your conditions, but there are some general requirements that may qualify you.
A Debt Management Plan can be a great option for you if:
You can’t afford to pay your debts. If you are currently living paycheck-to-paycheck and/or don’t know where the next bill will come from, then a DMP may be right for you. This is especially true if you have unsecured debt (e.g., credit card debt).
You want to get rid of your debts in a way that is affordable for you. For example, if one or more of your creditors has agreed to accept less than full payment on their loan or other obligation and they won’t accept anything less than what they’re owed—then it may make sense for them too!
You have good or decent credit, and you are regular on all your bills, but you are overextended. You might be able to pay the minimum due on your accounts every month, or sometimes even send a little extra, but never enough to make any significant progress towards eliminating your debt.
You’re already completely out of your depth. Your unsecured debt accounts have been turned over to collection agencies or are late. Creditors are ringing you on a regular basis, and your credit score has suffered as a result.
You are just beginning to fall behind in payments, or you can see this will be the case soon if you do not reduce your expenses.
To be eligible for a Debt Management Plan, you must have at least £5,000 of unsecured debts.
How do I apply for a DMP?
- Contact your creditors.
- Ask for a DMP application form.
- Complete and return the form to the creditor. They will assess your request, then send back an agreement on whether or not they will be granting you a Debt Management Plan (DMP).
- You can get help from Acme Credit Consultant to help you set up a DMP plan.
Debt Management Benefits
A DMP can help you pay off your debts faster, saving you money in interest payments over time. This can be especially helpful if you have several debts that are high-interest loans and need to pay off all of them at once.
You pay only what you can comfortably afford
Tailor-made to suit you
Your Creditors Are Handled by Us
We handle all the paperwork, communicate with your creditors directly, and negotiate reduced repayment terms on your behalf.
No Harassing Phone Calls & Mails
We Aim to Freeze or Reduce Interest and Charges
The interest and charges on your account will be frozen or reduced. It means that a larger portion of each payment goes toward the principal, and you won’t be charged those expensive late and over-limit fees (which add up quickly!!).
If you are struggling with debt problems and need to set up a debt management plan, contact us today and get a personalized debt management plan for your needs and situation. We also provide free debt advice and free appointments with confidential services
DMP Frequently Asked Questions
What Will Be The Fees And Charges For DMP
Our initial setup fees will be charged as below;
- If your monthly disposable income is less than £125 then our initial setup fees will be three months of your disposal income (Payable in six equal monthly instalments).
- If your monthly disposable income is more than £125 then our initial setup fees will be £250 plus your one-month disposable income (payable in a minimum of six equal monthly instalments). We do not charge any additional management fees during the first six months of your payment plan term. Our management fees become payable from the seventh month onwards as per clause c.
- Unless otherwise agreed, our standard fee payable from 7th month onward will be 20% of your monthly payment or £40 whichever is higher (subject to the maximum £100 fee cap) for managing up to 08 creditors on your file, 22% of your monthly payment or £45.00 whichever is higher (subject to maximum £100 fees cap) for managing from 9 to15 creditors. From 16 to 20 creditors, our fees will be £70 or 22% of your monthly payment (subject to the maximum £100 fee cap). Above 21 Creditors our fee will be flat £100 of your monthly payment. You authorize us to recover our management fee from the client bank account prior to issuing payments to your Creditors mentioned in the ACME Pay Plan.
– You do not pay us management fees upfront.
– We will send payments to all your lenders from month one onwards, which will always be 50 per cent or more of your total monthly payment to us during the whole term of the plan.
What Happens To The Interest And Charges Once I Go On A DMP Plan?
Your debt solution company aims to freeze interest and charges on your debt account. In most credit cards and store cards, it is generally agreed upon by creditors. However, on HMRC tax debt, it is likely that interest may get added to your tax debt as HMRC tax debt is a priority debt. If the debt is repayable under a County Court Judgement (CCJ), there is likely to be a statutory interest of 8% per year applicable to it. Please check the court judgement copy or speak to your debt advisor.
Will my creditors accept a reduced payment amount through a Debt Management Plan (DMP)?
When you sign to an DMP and have signed up for a DMP, our Creditor Liaison Team will negotiate with your creditors, and request that the interest and charges on every debt are frozen. This means that the funds that we provide them will lower the balance faster rate. Be aware that your creditors are not required to accept the reduced offer. In some circumstances, interest and fees can still be added however, this is not the norm.
They might also turn down your offer if they feel that you’re able to pay more than what you are suggestingor if you are not able to maintain regular payments.
How are my payments distributed on a Debt Management Plan (DMP)?
When you sign up for an DMP and have made your payments, the amount you pay towards each of your creditors will be determined on a pro-rata basis. This means that the money that remains after the essential expenses you pay for will be divided between your creditors on a percentage basis based to the total amount you owe them. The payment will be made directly to creditors in five working days after we receive your payment.
