Debt Management Plan (DMP)
About a DMP
Repay your debts in one, affordable monthly payment
Entering into a Debt Management Plan (DMP) will give you an opportunity to repay your debts at a rate you can afford.
How do I apply for a DMP?
Firstly, you will need to understand how much money you have coming into the household and how much you have going out each month. This is your budget and it will enable you to see how much money you have leftover at the end of the month to pay towards your debts.
You can work out your budget by completing an Income and Expenditure form, which you can either do by completing our form online, or you can chat through your situation with one of our debt advisers on 0800 280 2816. They will be able to advise you on which costs you can include, and what level of expense your creditors will expect to see.
Whichever way you choose to do it, we will be able to work out how much money you need each month to pay your bills, and other regular costs such as food, transport and hobbies. If there is some money leftover after all your regular costs have been paid, that will go towards paying back your creditors.
Will my DMP be accepted?
When we have worked out what money you have leftover, we will talk through all of your options with you and recommend the most suitable debt solution for your circumstances.
If a DMP is right for you, we will contact your creditors and make an offer of payment, based on what you can afford. In the majority of cases, the creditors accept the offer so we can start setting the Debt Management Plan up for you.
It’s worth noting that only unsecured debts will be included in a DMP. If you have a mortgage or a secured debt such as a Hire Purchase agreement on a car, this will be accounted for in your budget so you will have enough money to continue making payments towards these bills.
How do I start my DMP?
Once we’ve contacted your creditors, you will start making one monthly payment to PayPlan and we will then divide it up and share it amongst your creditors fairly. They will all receive an amount on a ‘pro rata basis’ – this means it will be relative to the amount of debt you owe. So, the creditor you owe the most to receives the biggest share of your monthly payment and so on.
Once in your DMP, you will continue making payments until all your debt is cleared. We will let you know how long we expect this to be when we discuss the plan with you. Most creditors will freeze interest and charges on your debts, to allow you the opportunity to repay them as quickly as you can afford. However, some may continue to add interest and charges (but in our experience, this is rare). If this is the case, it will take you longer to repay your debts.
If you’re concerned about the length of time it could take you to repay your debts, you may want to consider an Individual Voluntary Arrangement (IVA), which will mean all interest and charges will be frozen and in most cases will leave you debt free in five years.
Is a DMP right for me?
A DMP with PayPlan could be suitable for you if you owe more than £4,500 and have more than one debt. It could be a good option for anyone who is able to repay their debts in a reasonable amount of time.
If you are a homeowner and have lots of equity in your house, a DMP could be a good choice because creditors don’t usually ask questions about it, as they know you are repaying your debts as quickly as you can. If you’re concerned, it’s a good idea to speak with one of our advisers who can run through the suitability of every debt solution with you.
Why should I choose PayPlan for my DMP?
PayPlan don’t charge any fees for setting up or managing your arrangement. The creditors pay us a fee for the work we do so 100% of the money you pay goes towards repaying your debts. Find out more about the benefits of choosing a DMP with PayPlan.
We will also review your plan once a year to ensure you can afford your payments and check whether a DMP is still the best solution for you. Other than that, you can enjoy the freedom of knowing your debts are under control and are being repaid at a rate you can afford.
Will my creditors still contact me in a DMP?
Creditors are still legally allowed to call or write to you during your DMP, but if you maintain your payments, this is likely to reduce over time. However, if you miss any payments, they could start contacting you again.
There are some letters creditors have to send you by law, such as an annual statement or default notice, and these will continue if you’re in a DMP. If a particular creditor is still contacting you a lot, pressuring you to increase your payments
or pay them outside the plan, then please let us know so we can help.
DMP Repayment Calculator
Simply move the sliders to show the percentage you pay to your current debt management company and to show how much you currently pay into your DMP. Our debt management plan calculator will use these figures to work out how much more money you could be repaying towards your debts.
What to expect from a FREE debt management plan with PayPlan?
Single, affordable, regular payments
You make just one payment every month, at the most convenient time for you – for many people this is just after they’ve been paid. We then use this payment to pay all of your creditors. Read more below if you need help with debt management plans…
Reduced monthly payments to suit you
A Debt Management Plan (DMP) is an informal agreement between you and your creditors, where you arrange to pay off your debts through lower monthly payments than you are currently responsible for. Your creditors may agree to freeze interest and charges, which gives you the reassurance that your debts are not continuing to grow. A DMP is not a legally binding debt solution and won’t appear on any public registers, so nobody needs to know about your DMP unless you tell them.
It’s possible for you to arrange your own repayment arrangement with creditors, or you can use a company like PayPlan to set a DMP up on your behalf.
Not only does this reduce the legwork for you, but unlike many companies, PayPlan offer completely free debt management plans, as we are funded by donations from the credit industry.
We are available from 8am to 8pm Monday to Friday, and 9am to 3pm on Saturday. Alternatively, you can get debt help online by using our online debt solution tool, PlanFinder.
Convenient online tracking
You can check the progress of your plan at any time on PayPlanPlus.
This free online service enables you to keep tabs on all the payments you make, the amount that has been paid to all of your creditors and allows you to see an estimated time scale of when your debt will be repaid.
Freezing of interests and charges
While PayPlan cannot guarantee to get interest and charges frozen in all cases, we will talk to your creditors and ask them to freeze interest and charges while you make your repayments. We have an excellent reputation within the credit industry and use this to help you.
Friendly and experienced staff
You’ll find our trained advisers understanding of your situation and ALWAYS ON HAND to assist you with any questions you have about your debt management plan.
How about the ‘small print’?
We always ensure our clients are aware of, and understand, all aspects of the debt solutions we advise on. So before committing to a Debt Management Plan, you should be aware that failure to keep to your agreed repayment terms will result in your plan being cancelled. If you fail to meet your payments your creditors might also look to take legal action against you to ensure they get some form of repayment from you.
By entering into a DMP your regular repayments may be lower, however your repayment period could be longer and the total amount payable higher. This is why when you contact us we will always look at a range of solutions – we want you to get out of debt as soon as you can so you can start enjoying your life again.
Like the majority of debt solutions, entering into a Debt Management Plan will affect your credit rating. A DMP is not a formal agreement so creditors do not have to accept the proposal and they can continue to register defaults until you have repaid all your debt. With some debt solutions, your credit rating will only be affected for a period of time. However with a DMP your credit rating could be affected for 6 years from the date of the last Default Notice issued against you, which your creditors can issue at any point during the plan.
PayPlan Debt Management Plan reviews
After first contacting National Debtline, my case was taken up by PayPlan. At each stage I was treated sympathetically with each solution explained clearly. With my DMP, PayPlan have helped set up a budget to repay my creditors. They have taken away the worry of contacting each creditor in turn. PayPlan send regular e-mails with different money saving tips etc. It will take time but I am determined to see this through with the help of PayPlan.
The plan itself is excellent, it is a struggle at times to find the money but we try and manage to pay on time, every month.
Being able to make affordable payments have taken away a lot of the stress of trying to juggle money every month
Take advantage of our free debt help and advice – Contact us today
At PayPlan, we know that debt is an accepted PART OF LIFE for many people. But we don’t believe that this has to be the case.
We advise on a wide range of practical solutions to help people deal with their debt and get on with LIVING THEIR LIFE rather than just accepting it and struggling to survive. To start putting your debt worries aside, call us free on 0800 280 2816 and have a chat with one of our fully trained advisers.
You can be confident of receiving sensible, sound advice without obligation. When you call we will talk you through a full review of your current circumstances and explain the choices that are available to you – we will also recommend the most suitable solution and assist you with your application.
If you already think that a DMP is the right choice for you, then simply call our advisers today on 0800 280 2816 and take the first step towards regaining control of your life and your debt. And please don’t be put off if our advisers are busy helping our other clients, just fill in our online Debt Help form and we will call you back.