Debt Management Plan (DMP) Could be the Answer.
If you are struggling to make minimum monthly payments to your creditors, then maybe a short term solution is a debt management plan?
Here is a case where someone was really struggling to pay the monthly minimum payments to their creditors. After completing an in depth financial fact find, it was found that they were only able to afford to pay Bank of Scotland £10 per month on a pro-rata split including all their other creditors.
This is the letter from the debt collection agency Blair, Oliver and Scott Ltd:
“Blair, Oliver and Scott Limited
Client: BANK OF SCOTLAND
Thank you for your recent communication enclosing an up-to-date financial statement for the above customer
We confirm that at this stage, the proposal to pay £10.00 per month is acceptable.Please note that this arrangement will be subject to periodic review and does not limit BANK OF SCOTLAND’s contractual right to take money invested in another BANK OF SCOTLAND account and set it off against the amount your client owes on the above account all stop
the first payment should be made by 27/12/11. Payments should be sent direct to Blair, Oliver & Scott at the above address quoting the customer’s name and the above account number for reference.
We would advise that there is no requirement for you to notify us of your reviews of this arrangement, unless the customer is in a position to increase repayments.”
A debt management plan is an informal arrangement and in most cases the interest is frozen.
Are Debt Management Plans Good
The really good thing about a debt management plan is, they are relatively easy to setup and within a short period of time they help to ease the pressure from creditors. This then allows you time to think and research as to whether or not you want a more permanent debt solution. You can of course do your own DIY Debt Management Plan.
For some people being in a debt management plan, where they are only making token payments suits them just fine. For other people the idea of being in debt is not an option, so other debt solutions are preferable.