If you find yourself struggling to meet things like your credit card repayments of car loan repayments it may be time to consider taking out a debt management plan or DMP. These plans allow you to restructure some of your debts and potentially reduce the amount you have to pay back each month.
Who is a DMP Suitable For?
Anybody that owes less than £10,000 could potentially benefit from a DMP. However, any debt that is included in the plan has to be unsecured. Therefore, it is generally only suitable for managing credit and store card debts and unsecured loans. Unfortunately, you need to have some form of regular income to qualify to set up a debt management plan. Your disposable income has to be enough to enable you to meet the single monthly payment you agree to as part of the DMP. You also need to be a resident of the UK.
It is important to bear in mind that your credit rating will be adversely affected. However, you need to balance the fact that if you do not make your repayments your credit rating will be adversely affected anyway.
Setting Up A Debt Management Plan
To set up such a plan for yourself you need professional help. Fortunately, there are debt management companies out there who can help you, and do so for a relatively low fee.
The best approach is to carry out a search on the internet and speak to one or two of them. Look for firms, who are part of DEMSA, they adhere to a strict set of guidelines approved by the Office of Fair Trading. This means that the advice and help they give is sound and the fees they charge are reasonable.
However, this does not mean you should not shop around and find a firm who will manage your debt management plan for the best price possible. Try not to use a firm that requires you to pay their management fees up front. Doing so will only put more pressure on your finances. Instead, look for a firm that allows you to pay their management fees as part of your monthly payment plan.
To find out everything you need to know about debt management plans , and work out if they could help you to break free of debt visit the Debt Free Direct site.