Debt management plan; Is it right for you?
A debt management plan (DMP) helps you manage your debts and pays them off at an affordable rate by reducing monthly payments. DMPs from Free Debt Helpline Charity are fee-free.
We will work with you to establish a budget that meets the needs of your household. Any left-over money will be consolidated into one monthly payment to your debts. We do not charge any set ups or monthly fees. Many debt management companies provide DMPs, but could possibly charge a fee.
For the client’s assurance, the debt management plan is not considered a loan. It is a consolidated process that your creditors work with whilst collaborating with debt managing companies to reduce your debts.
This allows the monthly payments to be waivered off as well as arrangement of affordable payment scheduling that allows payment of debts from 3-5 years of span.
There are multiple advantages of having a debt management plan including ;
- Realistic formation of your monthly budget that allows formation of your financial goal
- Reduction of interest rates using effective credit card consolidation
- Improvement in the credit score with ease of payments, allowing timely payments
- More organized repayments.
To consider other things with DMPs:
Your creditors don't have to agree to the payment getting reduced offering a DMP, but even if they don't we will still send them your payments as they have to accept them as your debt repayment legally. your creditors will not receive payments on your behalf from us until your DMP is set up.
Considering a DMP:
A free debt management plan will allow consolidation of your debts as well as effective organization of the payments with more realistic representation of your personal finances. In addition, the plan will minimize the applicable interest rates on your debts with credit card consolidation.
However, considering a DMP, you should consider credit card counselling that will help you provide an effective idea regarding the applicable interest rates as well as ensuring that the plan does not end in financial dead end or bankruptcy.
Multiple counselling companies offer sessions regarding credit card consolidation free or with minimum charges. In addition, The Federal Trade Commission recommends finding of a credible counselling source in order to avoid frauds.
We at FreeDebtHelpline also provide free counselling services regarding credit card consolidation as well as providing effective insight regarding DMP.
Before opting for the debt management plan, you should consider the following facts:
- With the formation of the consolidated credit card, the creditor organization opting for you may restrict applications for new or other credit cards while the client is still enrolled in the plan Lower interest rates as well as lower monthly payments can also be opted. .
- In case there are delays within your plan, the consumer is viable to face gap in information regarding decreased debt and lowered interest rates.
- The period for payment of debts using the debt management plan is from 36-60 months (3-5 years).
You have to be aware that if the creditors carry on adding interests and charges, this can increase the amount that you owe currently.
it will take longer to repay your debts on a DMP than you carrying on making your contractual payments as you will be making lower and more affordable payments.
Signing for Debt Management Plan:
Before signing up for a free debt management plan, consulting your credit counselor will allows you to gain an insight regarding the important information to be included in the plan. This will allow you to negotiate the terms of interest rates as well as compile a payment plan that suits you.
Your credit counsellor will provide information on your monthly expenses as well as the amount to be consolidated for the debt plan. Signing up for the plan will concise your expenses as well as provide an organized view of your financials.
Researching online is one of the beneficial and quick ways to find debt management companies for the plan. Multiple profit and non-profit organizations offer DMP services for £25 to £55 per month. In addition, we at FreeDebtHelpline offer services for free debt management plan as well.
While applying for the plan, ensure that the company contacted is credible. In addition, ensure that you provide accurate financial information in terms of your income and expenses.
During the establishment of the credentials for the plan to signing up, you must:
- Ensure monthly payments to your counsellors.
- Review the monthly statements sent by your counselling firm to keep track of the payments and your financials.
- Ensuring which debts are paid as DMP takes care of unsecured debts typically.
- Be honest in providing your financial information as it will allow the creditor company to assess your financial feasibility in better manner.
- Avoid new credit lines as it will increase the amount of debt and will cause fluctuations within your plan.
- Ensure that your counselling agency reviews your finances in depth and work their way to reduce interest rates on your plan as well as offer educational tools for your understanding of the terms used in the plan.
- Make sure effective communication with the creditor agency as well as creditors in terms of status of your financials.
Finding out DMPs more:
Will DMP be right for me?
DMP will be right for you if you have some surplus money available every month once you have met your priority costs which consists of food, accommodation and utility bills. We will work with you to establish a budget that meets the needs of your household. Any left over money will go straight to your creditors.
How does DMP work?
By making a single monthly payment to us and we will divide it with those you owe money to. DMP helps you feeling stressed out from dealing with your creditors. It proves to them that you are making a commitment by repaying your debts.
What should I do I am far behind with my household bills?
If you are far behind with your priority household bills i.e: gas, electricity or mortgage and built up arrears then we could add these into your DMP so that they are included in your DMP monthly payments.
If you add these arrears onto your DMP we can help you fast as possible to clear them. Once your arrears start to clear up, the amount that is being paid towards your unsecured debts that will get increased.
This makes repaying your arrears stress free and easy as it is all included in the single monthly payment you will make to us. All you need to do is to make sure that you carry on making the normal monthly payment towards your priority household bill.
Why shouldn't you have to pay for a DMP?
At FreeDebtHelpline we do not believe that you should pay for DMP. That is why unlike many debt management companies, we do not charge you to administer your plan. You can guarantee that any left-over money you own is going towards paying your creditors.
Do you want to switch your DMP to us?
If you have already got a DMP and is getting charged for it, some of your monthly payment may be going as fees to your debt management company. Switching to a Free Debt Helpline DMP means that all of your monthly payments go towards repaying your debt – so you will be debt free much faster.
Moving your DMP FreeDebtHelpline is straightforward. The first step is to learn more about your household budget and debts so that we can advise what is a suitable solution for your debts.