At Royal Exchange our aim is to provide comprehensive information and advice an all aspects of personal debt and solutions to financial difficulties. Read the articles below to find out more about Debt Management Plans and how they can help you to solve problems with unsecured debts.
A Debt Management Plan (DMP) is a possible solution for people facing difficulties with unsecured debts such as credit and store cards. They are one of the most common solutions to consumer debt problems used in the UK.
Although there are no fixed qualifying criteria for a Debt Management Plan to be eligible you will need to have unsecured debts that you can no longer afford to repay. You will also need to have enough income to pay off at least a small amount of your debts each month.
If you are finding that you can no longer keep up with your loan, credit card or store card repayments then a Debt Management Plan could be the best option for you. Debt Management Plans have a number of advantages and disadvantages.
Although Debt Management Plans provide a good solution for many people with financial problems they won't always be the best option. Depending on your circumstances there are other alternative options that may be more appropriate.
If you enter into a Debt Management Plan then it is likely to show on your credit file and it can affect your ability to gain credit. However if you can't meet your debt repayments then there is a good chance that your credit rating has already been affected.
In a Debt Management Plan (DMP) your debts are consolidated and repayments reduced so that you pay a single regular amount. A joint DMP works in much the same way except that you and your partner's finances will be considered as one.
Although some people attempt to set up a Debt Management Plan themselves, it is more common to do so via a specialist debt management company. Typically debt management companies will provide a number of services.
Debt Management Plans (DMPs) are most commonly seen as a solution to consumer debts. However if you are a sole trader or self employed then there is no reason why you can't apply.
Although Debt Management Plans and IVAs are not the same thing they do have much in common. Which of the two will be the best option for you will depend on your own financial circumstances.
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