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If you’re one of the 8.3million consumers in the UK struggling with debt, then a debt management plan could be one solution to get your finances back on track. Debt management plans are ideal for people who can make regular repayments for unsecured debts and loans but don’t have enough available cash to meet the agreed repayments. Getting caught in a cycle of mounting debt often means you owe more each month as creditors apply charges to all outstanding sums. With a debt management plan, you can make affordable monthly repayments for your debts and still have money left over to pay for all your daily living expenses.
You can set up a debt management plan anywhere in the UK and for many people, it’s an ideal way to get debts and finances back on track.
When you sign up for a debt management plan (DMP) you make just one regular and affordable monthly repayment to chip away at your outstanding non-priority debts. Non-priority debts include overdrafts, credit cards, store cards, and personal loans, priority debts include council tax, mortgage or rent payments, and utility charges. So, if you owe money for priority and non-priority debts you may want to speak with an expert at NDS to work out whether a debt management plan is the best way to go.
If you sign up for a plan you will need to work with your DMP provider to establish a budget and work out just how much money you can afford to set aside for your debts each month. There are lots of different DMP providers, and some of them do charge fees for their services, so it’s important to shop around the marketplace before signing any agreement. It’s also vital to ensure your DMP provider is registered with the Financial Conduct Authority.
Some of the benefits of signing up for a DMP include:
The disadvantages of DMPs can include:
If you have the cash available each month to make regular payments then a DMP could be ideal for you. In this situation, you’d be assisted in setting up a monthly budget, so you have cash for all your essential outgoings and any excess cash is targeted towards non-secured loans.
Your credit rating will be impacted when you go on a DMP because you’ll be paying less than the agreed amount for all your debts. This means you won’t find it easy to obtain any further credit.
To find out more about the debt solutions available to you, get in touch today and an advisor will be happy to discuss your circumstances.
Debt write off applies to unsecured debts and on completion of an IVA. A debt write off amount of between 20% and 80% is realistic, however the debt write off amount for each customer differs depending upon their individual financial circumstances and is subject to the approval of their creditors.
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Free money help and advice can be found at the MoneyAdviceService.org.uk