How could a DMP help me?
There are far too many people in the UK who are struggling to stay in control of their finances. Mounting debt leads to less ready money, leading to yet more debt and a spiral that never seems to end. Thankfully, there are solutions available right now that could ease the stress levels in no time.
One of them is a Debt Management Plan (DMP). It can help you if you have problems with non-priority debts such as credit card balances and payday loans, and you have some income but not enough to keep up with all your repayments. Regaining control of your spending is far easier after that.
With help from a debt specialist, an income and expenditure document will need to be drawn up. After allocating you with reasonable living expenses, a monthly sum will be set aside to pay your debts. In most cases, interest fees and charges will be frozen, although your creditors aren’t under any obligation to agree to this.
Unlike with an IVA, a DMP won’t usually lead to your debts being written off at the end. This is a way of reducing your outgoings to a more affordable level, bringing you some much-needed breathing space from then on. If you’re in a position to afford the monthly cost, you’ll be reducing your liabilities gradually.
Advantages and disadvantages to consider
There are drawbacks that need to be taken into account, of course. Signing up to a DMP will affect your credit rating as well as your ability to obtain credit at a later date. In some instances your creditors may still want to contact you, and they will still be allowed to do so.
One of the more pleasing aspects of life with a DMP in place is the fact that you know exactly what you have to pay each month. After many months and years of coping with mounting debt, you can finally have the peace of mind that comes from knowing what your budgets are likely to be.
To find out more about the plus and minus points of a Debt Management Plan, have a chat with the team at Bluesky Finance. We have all the experience you need and the answers you deserve. Call 0141 488 2212 to find out more.