Letter to Creditors Making an Offer of Payment for DMP
So, you have now completed your Income and Expenditure (I&E) for a Debt Management Plan (DMP), which has calculated how much you can afford to pay each creditor or Debt Collection Agency (DCA). So the next step will be to write to the DCA’s with a covering letter and your completed I&E. Your covering letter should include an offer of payment as calculated by the attached I&E. It is always a good idea to request the freezing of interest, as many creditors and DCA’s are a little slow to stop this (they just want even more money). Request from the creditor their account details, this shows that you are ready to start resolving the problem, it also allows you to set up a monthly standing order to them.
Should I Pay Debt Collect Agencies by Standing Order or Direct Debit
The problem with setting up Direct Debit with DCA’s is that you have less control over the payments. However, if you make payments to creditors and Debt Collection Agencies by standing order, you have control of the monthly payments. If say for example, you have a drop in salary, you can instantly via your bank change the Standing Order accordingly. With a Direct debit there is less control and also, creditors can increase payments from their end. So if you want to be in control then Standing Orders is the preferred option when managing a Debt Management Plan.
Example Letter to DCA for a Debt Management Plan
Just make the relevant changes to this letter to suit your needs.
Debt Collection Agency Address
Company: Original company e.g. Barclaycard
Your Reference: The DCA’s reference number
Balance: Amount outstanding on loan or card
Offer: The amount that you can afford to offer them according to your I&E
Please find enclosed Income & Expenditure and Letter of Authorisation (if dealing on behalf of the debtor) for the above client.
In view of our/my/client’s current indebtedness to you and from the figures avail, I/we/client propose a monthly payment of £8.00 (example) , as indicated on the enclosed Income Expenditure.
Would you please be kind enough to supply us with the relevant bank account details, in order for me/us/client to make regular monthly payments by standing order to your company/client?
Additionally we would respectfully request the freezing of any interest on the outstanding balance for the duration of the plan in line with section 14 of the British Banking Code.
I/We would like to thank you in advance for assisting me/us regarding this matter.
Income and Expenditure for Debt Management Plan (DMP)
If you are looking for a copy of the income and expenditure, you can download it from this page: I&E Spreadsheet Download. If you are using the income and expenditure spreadsheet for the first time, I would suggest that you search this site for DIY Debt Management Plan. Even though you may feel under pressure to act fast, take the time to read some of the posts on here about DMP’s, as there additional information on what to be aware of.
Free Help and Advice with Your Debts
On this site, we do not offer advice, so we would advise that maybe your first port of call would be Citizens Advice. They offer a free service and should be able to help you with your situation.