How Can You Arrange A DMP?

August 6, 2022

A debt management plan (DMP) is designed to help people repay their debts at an affordable level. An agreement is drawn up between you and the creditor to help you pay off the debt in small monthly amounts.

It is possible for a DMP to be arranged directly with creditors yourself, or you may be able to ask a licensed debt management company to arrange one for you. Some companies may charge a small fee to do this, which will be taken out of the amount you pay each month.

In order to put a DMP in place, you need to have the ability to pay a small amount each month, and stick to it. However, this amount will be less than the contractual amount with the creditors.

If you think that a DMP might be right for you, the first step you need to take is to draw up a monthly budget to get a realistic idea about what you can afford to pay. To do this, write down your monthly income from wages, benefits, and so on, and then write down all your essential expenditures, such as utility bills, food, and rent or mortgage payments.

Which debts are included in a DMP?
DMPs normally apply to unsecured debts such as credit card loans. They cannot usually be used for essential household bills and mortgages, which are known as priority debts.

A DMP will affect your credit score because your loan repayments won’t be meeting the full monthly amount. However, not taking action to repay your debts in a manageable way will lead to a worse situation that will be even more damaging to your credit rating in the future.

If you are looking for IVA mortgage specialists, get in touch with us today.

Your home may be repossessed if you do not keep up with your mortgage repayments.

Back to Blog
;window._klOnsite = window._klOnsite || []; window._klOnsite.push(['openForm', 'R6NsLH']);