Email National Debt Relief

What is Debt Management?

If you are having difficulty with keeping up with your monthly debt repayments, a Debt Management Plan might help you to get back on track.

A Debt Management Plan (also known as a DMP) is an informal agreement that allows you to lower your monthly debt repayments to an amount that is more affordable for your circumstances. Your debt management payment is determined by analysing your income, expenses and financial priorities and seeing what money you have left over to pay to your creditors each month.

You can continue to pay your debt management plan until your debts are repaid in full, or until your circumstances change, or until you decide to opt out of it. It is a flexible plan.

While debt management carries many benefits it should be noted that there are a number of drawbacks. For instance, your credit rating may be impacted if you are paying reduced payments. As you are likely to be paying a lower amount to all your creditors in a plan it will take longer to clear the debt than it would if you made your contractual payments under the original terms agreed with your lender.

You can read more advantages and disadvantages below.

If you are struggling to make your agreed debt repayments, contact us to see if we can help you to make the payments more manageable.

To qualify for a DMP you should

have debts you cannot afford
owe money to at least 2 different lenders
be willing to offer a smaller affordable payment every month

A DMP could help you

  • 1 easy monthly debt repayment
  • a payment that is affordable for you
  • a plan that allows flexible payments
  • current interest and charges negotiated or stopped
  • a dedicated personal case manager
  • 'opt out' at any time you like

Advantages of Debt Management

  • An Informal agreement that can be stopped at any time as your circumstances change (for better or worse).
  • Interest & Charges could be frozen if creditors agree.
  • Creditor pressure eased as you can direct them to your case manager.
  • 1 easy monthly payment to cover all unsecured debts.
  • A debt management company will negotiate with creditors on your behalf, so offers are more likely to be accepted and interest frozen than if you try to do this yourself.
  • A debt management company will help you prepare your plan, including agreeing the level of your household and personal spending based on guidelines, which can then be used to put your case to the creditors.

Disadvantages of Debt Management

  • Can remain on credit file for sometime after completion if a default notice has been issued.
  • If your creditors refuse to freeze or reduce interest this can lead to increased debt level as repayments are less than original contractual payments.
  • Debts will be repaid over a longer period of time than if contractual payments were made.
  • You will repay debts until they are paid in full or untuil you decide to opt out.
  • Repaying debt over a longer period may increase the total amount to be repaid.
  • Your ability to obtain credit will be affected in the short term and might be affected in the medium to long term.

Debt Management Fees Compared

We strive to provide you with the cheapest debt management plans. The table below shows a comparison of our fees and rates compared to a few of the other private debt management companies in the industry.

Debt Management
Company
Set up
fee
Monthly
Charge
Min / Max Monthly
Fee
NO SET UP FEE £25 plus
£2 per creditor

£25 - £50

Baines and Ernst £240 fixed fee 20% of monthly
debt payment
£40 - £100
Fresh Start 3 months
payments
(£1,400 max, £240 min)
£38 £38 - 50% of monthly payment
Harrington Brooks 3 months
payments
(£1,400 max, £240 min)
£38 £38 - 50% of monthly payment
Valour Financial 34.5% plus
£24.99 per month

17.5% of monthly
debt payment

£39.99 - £99.99

* All information correct as of 03/02/2015. Information may be subject to change.

Debt Management example with fees

Below is an example of a typical debt management plan and the fees charged by various companies. Lets say the client has £9,800 of debts owed to 5 creditors. After analysing their situation, it is determined that they can only afford £250 per month to creditors. We'll assume for this example that each company has successfully managed to negotiate a freeze on interest and charges and the client is going to pay the debt management plan until completion.

  • Debts: £9,800
  • Number of Creditors: 5
  • DMP payment: £250 per month
Debt Management
Company
Set up
fee
Monthly
Charge
Total fees
paid
Duration of Plan
NO SETUP FEE £35 pm £1,595 45.6 months
Baines and Ernst £240 £50 pm £2,995 51.2 months
Fresh Start £750 £38 pm £2,372 48.7 months
Harrington Brooks £750 £38 pm £2,372 48.7 months
Valour Financial £667.44 £43.75 £2,570 49.5 months

Notice from the example above that we are the cheapest debt management company and because we do not add initial fees or added monthly payments, your plan will be completed quicker also.


Types of Debt Management

Monthly Payment Debt Management Plan

This plan will suit people who can afford to offer their creditors a set monthly payment. Under this plan you decide what can be afforded and offer this to your creditors until your debts are repaid in full.


One off / Lump Sum / Debt Settlement Plan

This plan will suit people who have only a lump sum payment to offer where thay can no longer afford to offer monthly repayments. Creditors will normally be open to accepting a lump sum payment as full and final settlement of a debt where monthly repayments cannot continue. It is not uncommon for creditors to agree to write off a portion of the debt owing in this situation. It is important to do it right so that you have a record of everything that has been agreed.

DMP Application

If you want to apply for Debt Management or find out further information about entering into Debt Management, complete our application form, filling out as much information as possible.
Apply for Debt Management here

DMP Case examples

IVA Case ExampleClient Name: Mr S
Debts: £25,000
Mr S was struggling with debts of £25,000 and creditors were looking for payments of £603 per month. After being refused a...
Read more and see other DMP cases

DMP Testimonials

IVA Testimonial "Just a note to let you know how pleased I am with your services. It was totally hassle free, no phone calls or anything from creditors. Thank you so much."
Read more of our client testimonials

Things to consider

Advice is free. A fee is only payable where further services are requested. In a Debt Management Plan we charge a fee to deal with your creditors, distribute payments and manage communications and negoatiations on your behalf. All fees will be explained in detail and discussed prior to commencement of any service or debt repayment plan.
Repaying debt over a longer period may increase the total amount to be repaid.
Your ability to obtain credit will be affected in the short term and might be affected in the medium to long term.
Creditors may still contact you with promotional material or to fulfil contractual obligations to you but they should deal with us in all aspects relating to the outstanding debts.
Interest and Charges will only be frozen at the creditors’ discretion.



DMP Enquiry


Your Total Debt (approx) Name Telephone / Mobile Number Email Message

Fees and key info


We are happy to provide you with debt advice only. We only charge a fee if you opt for one of our debt solutions. Fees will depend on which debt solution we provide and what your personal circumstances are. All fees will be discussed prior to commencement of any service or debt repayment plan.

Click here to read our fees and key info

Please note: From time to time we may refer you to other services providers or charities such as the CAB.

Money Advice Service


You can get free debt advice from the Money Advice Service – an organisation set up by the Government to offer free and impartial advice to those in debt. Click here for more information.

Client Review

Excellent support and lovely helpful staff

Star rating : 5/5

Staff are always there to help with any questions you need answered. They take the stress out of your burden, and help to put you back on track with financial worries. I would recommend National Debt relief to any of my friends.

Written on 13/03/2013,
Review Centre

Client Testimonial

Saved my life

Just to say how happy I am to have joined National Debt Relief. They gave a peace of mind and took the fear of the telephone ringing every day looking for money I didn't have.

Client Review

Chat to us online


If you have any questions about your problem debts you can have an online chat with one of our expert debt advisors.

You can chat to us via your computer or mobile device 6 days a week from 8am - 8pm, Mon - Sat

Click here to chat with a debt expert now