How a DMP can help with problem debts

A debt management plan (DMP) is a common way of dealing with debts that are spiralling and causing you problems. If you feel that your debt repayments are out of control, you may wish to consider the pros and cons of a DMP; it could help to lift the burden of debt from your shoulders.

What is a Debt Management Plan?

A debt management plan (DMP) is a form of debt consolidation, but you won’t have to pay the astronomical interest rates that some loan companies charge.

Under a DMP, your unsecured debts - such as credit card and unsecured loan repayments - will be managed by an intermediary such as Varden Nuttall or Debt Release Direct (DRD). The intermediary will compile a list of your debts and work out how much you can afford to pay back. Then, you make a single monthly payment to your intermediary, and they redistribute that money to your creditors according to a predefined plan.

A DMP can damage your credit rating, but it is also a proactive way to get your debts under control. In the long term, you will find yourself much better off and will be able to rebuild your credit rating over time.

With the help of expert debt advisors, you can use a DMP take control of your debts and repayments and ensure you can meet all of your obligations.

How can a Debt Management Plan help?

Interest and charges may be frozen. That means your debts will start to go down, even if you’re only making small payments towards each one.

You only make one payment, so you don’t need to juggle your money between multiple creditors. Your monthly finances will be much easier to plan.

Creditors have to deal with the intermediary, not you. If debt collection agencies are calling and writing to you regularly, starting a DMP ensures that all contact ceases, which can help you to feel less stressed.

A DMP doesn’t commit you to a long-term lock-in. If you need to cancel your DMP for any reason, you can do so at any time.

What are the alternatives?
 
For some clients, a DMP isn’t the right solution. People with a high amount of debt may find that a DMP isn’t manageable.

Some people prefer to take out an Individual Voluntary Arrangement (IVA) or consider bankruptcy.

If you’re not sure which solution is right for you, contact Varden Nuttall for friendly, no-obligation debt advice today or check their website at www.vardennuttall.co.uk.