Debt management plan

A Debt Management Plan (DMP) is a method used in various countries for paying personal unsecured debts. Typically, such debts are out of control – payments are late and/or take too large a portion of income, or even exceed it. A DMP usually involves a third party organization that looks at all or some of the debts, assessing income and budget, and re-negotiating interest rates and payments with the lenders. The negotiated rates and payment plan is based upon the probability of a higher likelihood of collection by the lenders in light of the debtor's more realistic monthly repayment.

Some debts have priority over others and not all are amenable to participating in a DMP.^[1] Money left over after dealing with these debts and priority expenses may be suitable for a DMP^[2]

References

1. ^ Dealing with urgent debts (in England, Wales and Northern Ireland)
2. ^ Options for dealing with debt (in England, Wales and Northern Ireland)

External links

• How to sort out your debts - Citizens Advice Bureau
• Scottish Debt Arrangement Scheme - Debt Arrangement Scheme