DEBT MANAGEMENT FAQ's
Can anyone have a Debt Management Plan?
What debts can I include on a Debt Management Plan?
How long does a DMP last?
How will I know my creditors are being paid?
Will my payment amount fluctuate each month?
Will my interest and charges be frozen?
Do my creditors have to accept the payments I offer them?
What effect will a DMP have on my credit rating?
Should I change my bank?
Can anyone have a Debt Management Plan?
A Debt Management Plan may not be the most appropriate solution to your particular circumstances, which is why we would arrange an appointment with a counsellor to discuss your individual circumstances and options.
What debts can I include on a Debt Management Plan?
Only unsecured debts can be included on a Debt Management Plan. This can include credit card debts, loans, bad credit loans, phone bills and fines.
How long does a DMP last?
This will depend on the amount of debt you have and the repayment amount you agreed with your Debt Advisor.
How will I know my creditors are being paid?
If your Debt Management Plan is setup by the Compare Debt Help.co.uk, you will receive detailed monthly statements displaying the breakdown to each creditor.
Will my payment amount fluctuate each month?
No. The amount you agreed with your Debt Advisor is the amount you will pay. If you circumstances change, i.e. you get a pay rise, there will be an opportunity to increase your payment which will enable you to pay your debt of faster and shorten the programme. On the flip side, if you are struggling with your agreed payment it may be possible to reduce the amount until your situation improves.
Will my interest and charges be frozen?
It all depends on the creditor. Most of the time there is not a problem with stopping or reducing the interest as we receive excellent co-operation from the majority of creditors
Do my creditors have to accept the payments I offer them?
Although most of the time creditors do accept the offer they are not obliged to. Look at it from their perspective, its better to get something back than nothing at all. If the offer was refused you would end up in more financial trouble and may end up going bankrupt. If this happens the creditors would lose ALL their money, so refusing an offer, in most cases, is not in their best interests.
What effect will a DMP have on my credit rating?
Taking out a Debt Management Plan will affect you credit rating on a short to medium term basis. Once the debt is repaid they your credit report will be updated to show ‘all debts satisfied’ and your credit score will start to improve. If you have a substantial amount of debt and have missed payments already, it is more than likely that your credit rating is already affected anyway.
Should I change my bank?
If one of your creditors is the same bank from where you are making payment, then it is strongly recommended that you shift to another bank where no money is owed. This is because once you make payment totally, then the bank might keep the money and charge you for what is remaining.
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