A debt management plan (DMP) represents a viable alternative to an Individual Voluntary Arrangement for those people struggling to cope with rising levels of debt. A DMP allows individuals to restructure debt repayments into a informal payment plan.
Before a DMP can begin, a detailed monthly budget is created. This takes into account every element of income and expenditure. Priority is given to essential expenditure such as mortgage or rent, utility bills, council tax costs as well as transport to and from work and general housekeeping expenditure. All other non-essential expenditure is then provided for in a monthly allowance, which will include the cost of car servicing, leisure activities, repairs to the home and other such expenditure. It is important that every element of expenditure is worked into a debt management plan to ensure that the repayment terms offered to creditors are realistic and manageable, allowing some leeway for unforeseen expenditure as and when it arises.
The ultimate aim of a DMP is to see your creditors repaid in full, and therefore the timeline in which to achieve this will be dictated by the level of your debts and the amount you can afford to repay on a monthly basis. This can also be affected if creditors do not agree to freeze interest and charges for the duration of the plan.
To give you a quick overview of a Debt Management Plan, here are a few points to consider:
For further information about entering into a Debt Management Plan, please refer to the Money Advice Service website
If you don’t take control of your debts your debts will take control of you. We can help you towards a debt free future, so take advantage of our free, confidential and insolvency advice and call us now on 029 2035 1490 or enquire online.
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An IVA allows you to renegotiate the terms of your arrangements with your creditors. If you have unsecured debts with a number of creditors that you are unable to pay this is an alternative to formal bankruptcy. An IVA (Individual Voluntary Arrangement) allows you to manage your debts with a solution that will give your creditors money over a period of time, which is normally 60 months.
Declaring bankruptcy may be a last resort, and you do need to make sure that you have fully considered the process from all angles – the advantages, the disadvantages and the implications. Our experienced personal insolvency team at PJG Recovery can talk to you about all of the solutions available to you, including Debt Relief Orders, Individual Voluntary Arrangements and informal Debt Management.
If you live in Scotland and are struggling to repay your debts you may want to consider entering into a Trust Deed with your creditors. A Trust Deed is an alternative to bankruptcy and is a formal agreement between you and your creditors, where you agree to pay an affordable payment each month for a fixed period - usually 3 years - in exchange for your creditors agreeing to write off the balance outstanding at the end of the 3 years.
Our advice is always free and we only charge when we start acting on your behalf. Our fees are proportionate to the activity we perform. Fees for IVA's, Bankruptcy and other services do differ, so please review our fee structure so you are aware of how debt assistance works.
We have been operating since 2002 and we are a team of professional insolvency practitioners who are passionate about helping you manage issues with your debts. Being in debt is a scary and worrying time for many people. More and more people are getting into debt through no fault of their own and this is where the team at PJG Recovery can really offer you advice and help to become debt free in the best way possible. We are here to help you "recover" from debt and are always happy to talk to you for free on how we can help.
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