Debt Management Plan
Where Whittaker Bell act as an intermediary between you and your creditors, our key objective is to make sure that you have enough money each month to live on.
It is then important that any extra money is used to repay your debt, and that you regularly review what you can spare each month, but it is equally important to be realistic in how much you do need to live on each month. A plan that you stick to will be better all round in building your confidence that you can manage your money effectively - your creditors are much more likely to hassle you when payments are missed.
The main advantage to a Debt Management Plan (DMP) is the flexibility that it offers, you can always move to an alternative debt solution like an IVA should your circumstances change.
One disadvantage of a Debt Management Plan is that if you can only afford a relatively small monthly payment then the plan could last many years. If there is very limited prospect of ever paying off your debt in a DMP it might be worth considering other options like bankruptcy.
Any fees that you are charged by the debt management company running your plan reduces the amount that you pay to your creditors, so be careful to check the level of fees. Avoid committing to a larger payment than you can afford (remember that the first 1, 2 or even 3 months payments are often kept by the debt management company and not paid to your creditor so less reputable organisations will try and make the monthly payment as high as possible). At Whittaker Bell we charge a flat fee.
The provision of debt management plans is regulated by The Office of Fair Trading.
You can download their guidance by clicking here.
