Understanding and Using Debt Management Plans.

Understanding and Using Debt Management Plans (DMPs)

Many people are suffering financially at the moment. It's hard to avoid at the minute due to the credit crunch and the recession. However, don't let your debt get out of control. Did you know that a simple thing like a DMP can help you get out of debt? Read on to learn more.

For more information on DMPs and a number of other professional debt solutions, such as an IVA, simply call the number at the top of this page. For immediate help with your debts please call Chiltern Debt Management on 0161 927 3388 today.

DMP - What does DMP stand for?

In literal terms, a DMP is the shortened version of a "Debt Management Plan". A debt management plan is a way for people who are struggling financially to pay back money they owe on personal loans, overdrafts, store cards and credit card debts - but at a rate that is affordable.

Debt management plans have been around for many years but, as the economy has nosedived and entered into recession, more people are now feeling the effects on their finances and are in need of DMPs.

Who could benefit from a DMP?

The credit crunch has made it much harder to get a debt consolidation loan, and with unemployment steadily rising, other ways to alleviate debt problems have become more accepted. These include debt solutions such as a Debt Management Plan, which have received greater press coverage than in previous years.

Anyone who has developed outstanding balances on two or more store cards, personal loans, overdrafts or credit cards could potentially benefit from a DMP. Generally, the amount you owe has to be over £2,000 for you to benefit from the plan, and your debts need to be to more than one creditor - i.e. one credit card debt with Barclaycard and a personal loan with NatWest.

The stigma of being in debt also seems to be clearing, as people are recognising that many friends and families are affected by the current conditions and are under pressure financially. So it's now no longer embarrassing to talk about DMPs, as many more people share their similar experiences of being in (and dealing with) debt. As a result, many more people would be recommended to seek impartial debt advice so they too could benefit from a Debt Management Plan - rather than carrying on with their current struggles.

For more information on DMPs and a number of other professional debt solutions, such as an IVA, simply call the number at the top of this page. For immediate help with your debts please call Chiltern Debt Management on 0161 927 3388 today.

How does a DMP help me deal with debt?

DMPs help people who have developed outstanding amounts on their unsecured balances to regain control of their finances whilst still repaying what they owe. This is done by gathering all repayments towards their unsecured balances into one single monthly payment - which is generally lower than the current contractual payments. As part of our service we negotiate with creditors to reduce (or freeze) the interest and charges on accounts, and reschedule repayments over a longer period of time - thus making repayments more affordable.

This allows finances to be brought back in line with how much you can actually afford, as the amount you pay each month is determined by how much you can realistically repay once your priority payments (mortgage, council tax, utility bills etc) have been paid.

You could also have all of the demand letters and calls from creditors handled on your behalf, so you don't have to worry about speaking with them. After a short period of time, these letters and calls will stop and creditors will contact your management company directly.

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