 |
 |
Debt Management Plans | DMPs | Debt Management N.IrelandWhat is a Debt Management Plan? A Debt Management Plan is an alternative debt solution provided by IVA Northern Ireland when your debt situation does not meet the criteria for an IVA. You would enter a Debt Management plan if you cannot afford your monthly debt payments or are struggling with your debts. A Debt Management Plan also known as a DMP is an informal agreement between you and your creditors where you agree to repay your debts at a lower monthly rate that is more affordable to you. Unlike an IVA a DMP is not legally binding so therefore the creditors can opt out of the arrangement at any time. What are the benefits of being in a Debt Management Plan?
|
||||||||||||||||||||||||||||||
 |
An Informal agreement that can be stopped at any time as your circumstances change (for better or worse). |
|
Interest & Charges could be frozen if creditors agree. |
|
Creditor pressure eased as they deal with us. |
|
1 easy monthly payment to cover all unsecured debts. |
|
A debt management company will negotiate with creditors on your behalf, so offers are more likely to be accepted and interest frozen than if you try to do this yourself. |
|
A debt management company will help you prepare your plan, including agreeing the level of your household and personal spending based on guidelines, which can then be used to put your case to the creditors. |
Some of the Disadvantages of a DMP are...
 |
Can remain on credit file for sometime after completion if a default notice has been issued. |
|
If your creditors refuse to freeze or reduce interest this can lead to increased debt level as repayments are less than original contractual payments. Any further collection actions may incur costs that will normally be added to the debt |
|
Debts will be repaid over a longer period of time than if contractual payments were made. |
|
You will repay debts until they are paid in full |
|
Repaying debt over a longer period may increase the total amount to be repaid. |
|
Your ability to obtain credit will be affected in the short term and might be affected in the medium to long term. |
|
 |
 |
 |
How long does a Debt Management Plan last?
Debt Management Plans last different lengths of time depending on each individual’s circumstances. You can remain in a DMP until your debt is cleared or you may want to only use it for a short time while you get on top of your finances. If you want to use a DMP until your debt is cleared then divide your debt by your new monthly payment and this will give you an approximate length of time the DMP will last.
When you contact IVA NI and give us a break down of your financial situation we can then draw up a repayment plan that you can afford and we will contact your creditors and ask them to agree to it. Usually your creditors will accept the lower payments if it's the best way for you to repay the money you owe and they may also agree to reduce or freeze interest and charges, so you can focus on paying off the debt itself. If a Debt Management Plan sounds like a debt solution that you might be interested in call IVA Northern Ireland now and we start the process of making you DEBT FREE.
