What is a Debt Management Plan?
A Debt Management Plan or DMP is what it says on the tin – a plan agreed with your creditors to repay your debts over a period of time by making regular, usually monthly, payments until all of your debts are cleared. Continue reading
There are a huge number of people in Debt Management Plans in the UK. Many of them have varied circumstances as to why they are in Debt Management over other solutions. Some may be solvent but to pay off their debts in full in accordance with the terms on which they borrowed the money in the first place they would have to dispose of some of their assets such as a house, and many of them are not prepared to do this. Continue reading
A Debt Management Plan is one of a number of ways of reducing the amount of money you owe to your creditors. It’s relatively easy to set up and it’s quite an informal way to address your debts in a simple yet structured way. Continue reading
Here we look briefly at a Debt Management Plan as a means of dealing with personal debt. This is the second of the four main approaches we are looking at in this series of articles about Dealing with Personal Debt. In the first article we looked at Debt Consolidation. Continue reading
What is a Debt Management Plan?
A Debt Management Plan is an informal debt solution designed to help you pay back your debts by means of affordable monthly repayments. In the plan your debts are paid back entirely, or until you decide to opt out of the plan. The speed at which creditors are paid off depends on what you can afford to pay each month and whether or not interest and charges are frozen. It is for this reason that Debt Management can last for a long period of time in some cases. If you use the services of a Debt Management Company to assist you in setting up your plan, they will be able to determine how long it will last for, after they have received all information about your circumstances. Continue reading
Debt Management is a simple process which you can use to reduce and clear all your outstanding debts without the need to obtain any further credit than what you already have. If you choose to use a debt management company to assist you in this process, it will deal directly with your creditors and it will negotiate with your creditors on your behalf. It will seek the agreement of your creditors to drop all charges on your loan accounts and to freeze all interest. There are a number of benefits for you the debtor and for your creditors arising from your entering into and adhering to the terms of a debt management plan, commonly abbreviated to a DMP. Continue reading
Debt Management Plans (DMPs) are much in news reports currently. A few unfavourable issues with the sector made the biggest headlines. Like any enterprise a handful of bad apples can give the barrel a bad name. In Britain the Office of Fair Trading (OFT) has recently taken actions to handle the bad apples. Essentially the most significant offences it has identified took place in the areas of marketing and charging behavior. In September 2010 it issued a warning to 129 debt management companies and followed that up with high profile enforcement actions against the worst offenders. The OFT plans to publish revised debt management direction in June 2011. It is not evident now whether or not the government plans to introduce any laws to control DMPs. Still the Ministry of Justice has circulated a consultation document relating to the way forward for DMPs. Three options for regulation are being offered. They are to marginally enhance regulation by the OFT, to introduce industry self regulation with voluntary codes of practice and/or to create a fresh solution i.e. a statutory DMP. Since the DMP is the predominant personal insolvency solution in the UK at the present time, it is perplexing that the government seems to shrink from the obligation of legislating in this area. So what is the current condition of national debt management advice and how can it give relief to debtors? Continue reading