Debt Management Plan
A Debt Management Plan is an informal arrangement with your creditors whereby you agree to make a set monthly contribution towards your debt. If you enter a Debt Management Plan you will be able to consolidate all of your unsecured debts into one affordable monthly payment.
You may be able to freeze charges or interest to enable you to repay the amount you borrowed more effectively.
Benefits of a Debt Management Plan
- Pressure from creditors is removed
- The repayments are based on what you can reasonable afford
- You will be able to make reduced payments to your creditors and we may even be able to freeze the interest on your outstanding debts
- You will not have to correspond with your creditors in the future
- You will only have to make one monthly payment to one company
Points to Note
- DM plan does not grant legal protection to the client.
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Creditors have the right to pursue the client using diligence.
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Both client and creditor have the right to withdraw from the plan. This may incur a cost which the client would have to pay.
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A DM plan may mean “up front” and/or monthly fees.
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Creditors may continue to issue letters or make telephone calls to the client rather than the person administering the plan.
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It is likely that the client’s credit history would be adversely affected.
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The client, in theory, continues to have access to additional credit. This may be restricted by their credit history.
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The plan is designed to allow the debts to be paid in full, normally with administration fees on top of the debts. The plan may be lengthy and the client’s situation has to be reviewed regularly.
After completing your income and expenditure New Tomorrow will be able to tell you whether we think a Debt Management Plan is the correct solution for you.
Please note for debt management advice we introduce business to New Tomorrow.