• As I’ve mentioned, a DMP stands for Debt Management Plan. It’s a financial arrangement designed to help people repay their eligible debts and loans in a more manageable way of a single payment.

• It’s not a loan, but rather a structured payment plan to you in repaying your debts and loans more effectively.

To be eligible you:

• should have a regular income, with money left over, which is referred to as ‘surplus’, after your monthly outgoing & expenses of at least £50 to be able to afford regular repayments.

• owe money to two or more lenders or even one lender with 2 types of credit.

• have unsecured debts/loans totalling over £4,500

If the above are met, DMPs are typically offered by many debt advice agencies, including us here at PayPlan – we don’t’ charge any fees to do it.

A Debt Management Plan is designed to help you pay off your unsecured debt at a more affordable rate. Unsecured debts that can be included could include:

Debts that cannot be included in a DMP are what we call priority debts. These include debts that have been secured against your home and other assets, as well as utility bills. These debts are:

• First you will need to go through an income and expenditure with an advisor or complete online. This can be done over the phone, or WhatsApp if you prefer, this is so we can get an overview of your financial circumstances. It's important we calculate a realistic 'surplus' so that you have enough money to live on and can afford one single monthly payment to all your lenders in your plan.

• We will also need a detailed list of your lenders and the outstanding amounts.

• When your Adviser has a full and complete picture of your lenders, who you owe money to, your budget, and amount that you can pay towards your debts, you will then have a couple of options explained to you, together with a specific recommendation tailored to your circumstances. One of these options may be a DMP.

• We'll explain why a DMP is recommended for your specific situation, but the choice is ultimately yours.

• If you decide to go ahead, we will need you to sign a letter of authority giving us permission to act on your behalf, don’t worry, this is very simple and can be done online.

• Once we receive your letter of authority, Payplan will contact your lenders on your behalf to offer your affordable repayment plan. This could include stopping interest and charges, Reduced interest rates or extended repayment periods.

• Only one monthly payment to PayPlan

• Most Interest and charges on debts frozen

• Regaining control of your household budget

• No hassle or contact from your lenders

• Possible improvement in your credit rating as you consistently make payments through the DMP

• Continue living in your home and protecting your family

• The Plan is flexible and will adapt to changes in your circumstances

• Working to become debt free

• Our service is free of charge. All the money you pay will go towards clearing your debts.

• Potential impact on your credit score

• Harder to obtain new credit whilst you are in the plan

• DMP's typically extend the payment period, often spanning several more years

• It could take longer to become debt free

• Some lenders may continue charging interest

• Some debts are not eligable to be part of the plan

• Having a history of a DMP may go against you for future credit

• Some debt agencies charge fee's to set up a DMP, PayPlan don't!

• If you miss a payment, the plan could be cancelled.