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 (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 monthly 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 must be struggling with your unsecured debt repayments and owe money to atleast two lenders. You will need to be able to offer a smaller affordable payment each month.
It is relatively straightforward to set up a Debt Management plan because it is an informal arrangement. You can either set up a Debt Management Plan yourself and negotiate with creditors directly or you can use a Debt Management Company.
If you want to go through a Debt Management Company like ourselves, we will negotiate with creditors on your behalf. The first thing we will do is have a chat to see if it is your best option. We analyse your financial situation including expenses and income, your employment, your debts which allows us to work our what you can afford to pay each month into your DMP.
A Debt Management Plan usually continues until you have paid off your debts in full, or until your circumstances change or until you decide to opt out it. It is a flexible plan designed to suit you.
Fill in the form if you would like to find out more about a DMP and if it might be a suitable option for dealing with your debts.
Below are some of the most frequently asked questions about Debt Management that we are regularly asked. If you have any Debt Management queries that aren't on this page, get in touch and we will be happy to answer them for you.
Debt management is a simple process to reduce and clear all outstanding debts without obtaining further credit. We deal directly with your creditors and negotiate on your behalf. In some cases we can have interest and charges reduced or frozen whenever possible, but this is not guaranteed.
Under a Debt Management Plan you look at your monthly income and essential monthly expenditure (house, car, food, clothes etc). After you have paid for all these essential items any money left is called your disposable income. This is what you can offer to all your creditors to settle your debts.
National Debt Relief advise thousands of people on this every month. We can also manage your debt plan for you. Call us to find out more.
We can deal with all your unsecured debts such as: loans, credit cards, store cards and bank overdrafts. If you are struggling to pay secured debts such as your mortgage or HP agreements we will ensure these outgoings are prioritised in your income and expenditure calculation, so you do not fall behind on payments. We will always suggest ways to deal with your secured and priority debts.
The best way to see if you qualify for a Debt Management Plan, or any of our other debt solutions, is to speak to one of our friendly financial experts. Call us for some advice and we will help you achieve your best possible solution. We strive to help you no matter what your situation. Call us now on 0800 888 666 0
This will depend upon your income, expenditure and personal circumstances. We treat each case individually and will make sure it is tailor made to suit your needs. You will only pay what you can realistically afford. This amount is then paid each month by standing order.
No, but you do need a source of income that is more than you require for living expenses.
We are extremely successful at negotiating with creditors and have a proven track record of getting offers accepted. We would like to make you aware that a creditor does not have to accept a reduced payment or to freeze interest and charges and this may result in your repayment term being extended. There is also no guarantee that any existing or threatened proceedings will be suspended or withdrawn. Any further collection actions may incur costs that will normally be added to the debt.
We have a dedicated Creditor Liaison department who will negotiate with your creditors on your behalf. Your dedicated Finance Manager will keep you informed.
No, National Debt Relief offers a complete guarantee of confidentiality and privacy in relation to your financial affairs. We will never disclose any information about you to any outside organisations and will never say who we are when we call you. This means that you can feel safe in providing your contact information, without the worry that others will find out that you are seeking our help.
We do not charge any upfront fees for our Debt Management Plans. There is no set up fee. When you enter into a Debt Management Plan with us we have a set fee of £25 per month plus £2 per account per lender per month. But the maximum fee you will ever pay is never more than £50 (depending on how much money you are paying into your plan).
For example, if you have a Disposable income of £186 per month (Your Debt Management Payment), and you have 8 creditors, your payment would appear to be: £25 plus £2 account per lender per month = £41
But because the maximum fee for this disposable income amount is £35, then this is the actual monthly fee that would come from your payment and not £41.
See the breakdown of payments below in detail.
|Disposable Income Amount||Maximum Fee|
|£80 - £99||£25|
|£100 - £149||£30|
|£150 - £199||£35|
|£200 and over||£50|
Yes. As we negotiate a reduction in your monthly payments, and you are no longer repaying the agreed amount to your creditors, a note of this may be made on your credit report. If you currently have arrears or a history of missed payments or late payments your credit rating will already be affected. Records are retained by the credit reference agency for 6 years.
The length of the programme depends on your own personal circumstances. Once we have gathered all your personal information we will be able to estimate the length of the arrangement.
A Debt Management Plan is flexible and informal. We do not want you to ignore your correspondence or contact from your creditors or those acting on their behalf. Once you have joined the arrangement you will have an assigned designated Personal Finance Manager who will deal with your case and any changes in circumstances that may occur.
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.
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.
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 account per lender||£25 - £50|
|Money Plus||2 months payments||17.5% of monthly debt payment||*£30 (DI < £100)
£35 (DI £100 - £200)
|Debt Advisory Line||Unknown||£38||£38 - £90 based on 18.5% of monthly payment|
|Harrington Brooks||3 months payments (£1,400 max, £240 min)||£38||£38 per month or 47.5% of monthly payment|
*All information correct as of 12/02/2018. Information may be subject to change.
DI stands for Disposable Income (the money you have available to pay towards your debts each month)
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.
|Debt Management Company||Set up fee||Monthly charge||Total fees paid||Duration of plan|
|NO SET UP FEE||£35 pm||£1,595||45.6 months|
|Money Plus||£500||£43.75 pm||£2,368||48.7 months|
|Debt Advisory Line||£0||£38 pm||£1,755||46.2 months|
|Harrington Brooks||£750||£38 pm||£2,372||48.7 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.
National Debt Relief will enable you to pay off your debts more quickly and with lower fees. Also, because there is no setup fee if you did decide to cancel early into your plan a large percentage of your payments will not be going towards paying fees.
I tend to panic for panics sake and all those at National Debt Relief ease my mind at every turn. Nothing seems too much.
I'm 4 months into the plan and have absolutely no complaints. Thank you so much.
Thank you all for helping me out of a difficult time with my finances! Great service from a great company.
From the moment I started dealing with National Debt Relief I knew they were the right choice for me.
Mr S was struggling with debts of £25,000 and creditors were looking for payments of £603 per month. After being refused a remortgage he approached National Debt Relief for assistance. We were able to reduce these monthly payments to £350 per month.