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What is a Debt Management Plan?

With adults in the UK now owing on average £7,984* (excluding mortgages) getting into trouble with personal debts can easily happen.

Perhaps you have so many debts that you have found it difficult to keep up and you have fallen behind on repayments. Or maybe your debt repayments take away a large part of your regular income and your monthly wage barely covers your outgoings.

A Debt Management Plan (DMP) is a viable option for people facing difficulties with unsecured debts. This can include a personal loan, bank overdraft, credit cards and store cards. They are one of the most common solutions to consumer debt problems used in the UK. There are a number of benefits to this type of arrangement.

A Debt Management Plan will -

• Consolidate your debts
• Reduce the size of your repayments
• In many cases freeze interest and charges
• Give you more flexibility than some other debt solutions

Is a Debt Management Plan the best solution to your debt problems?

In a Debt Management Plan your debts are consolidated so that you will make one single payment per month. This single payment is particularly advantageous if you have been paying off a large number of credit and store cards. Making only one payment will take away the stress of managing many different debts.

The payments you make in the plan are set at an affordable level based on your income and essential outgoings. Typically the arrangement will be a flexible one and so it can altered if there are any changes in your circumstances.

Debt Management Plans are not however a solution for all debt problems. They are only an option for people who genuinely can't afford to keep up with their current repayments and it will likely affect your credit rating. If you have high amounts of debt then an Individual Voluntary Arrangement (IVA) may also be a better option.

UK Debt Management Plan Experts

Spencer Hayes is one of the UK's leading debt management and financial services companies. We help thousands of people each year to regain control of their finances and become free from debt.

To find out more about what is a Debt Management Plan (DMP) and if it is the best solution to your financial problems call us today on 0800 028 4422 or complete the form to request a callback.

* Figures from Credit Action 

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