View Tim Corfield explaining Debt Management Plans
- A Debt Management Plan is an informal 'agreement' between you and your unsecured creditors'.
- It replaces all your current payments (to unsecured creditors') with one affordable payment.
- Who ever would liaise directly with your creditors' and make the monthly payment to your creditors'.
- Any calls from creditors' can be referred to us.
- The level of Debt Management Plan monthly payment is likely to be less than under an IVA – usually £100 is quoted as a minimum monthly payment but this is not a rigid amount.
- The amount paid to creditors' is split proportionally, depending upon the amounts due to each of the creditors'.
- There is no set period for the DMP to run. It can either run for a few months or it can extend for several years. A DMP is really suited for a short term period (say 6 months) and is not appropriate for a long term period (say 5 years).
- A DMP does not need an Insolvency Practitioner to manage the arrangement. Indeed, you can do it yourself but it is more credible to use a professional firm to negotiate with your creditors'.
- There is no fixed amount of debt to qualify for a DMP - typically this would be at least a total of £3000 with at least 3 creditors'.
- The DMP has no effect on your property and does not stop any of your creditors' taken action through the courts to obtain a 'charging order' against your property which will effectively secure that debt.
- A Debt Management Plan is not a legally binding arrangement and will not prevent any formal action being taken against you by a creditor.
Griffin & King does not deal directly with this procedure, but if we think this is the right direction for you to take, we will put you in touch with the appropriate organisation to help you.