A Debt Management Plan (“DMP”) is an informal agreement between an individual and their creditors. It is often the first step an individual takes in dealing with their debt problems.
There is no debt write off in a DMP, so payments will continue until all debts and interest. Moreover, creditors are not obliged to freeze interest and charges, and are not legally bound by the terms of a DMP. They can therefore change the terms of the DMP at any time.
There are, however, many advantages to a DMP and, if your circumstances are right, a DMP can solve your debt problems. It can provide a useful breathing space and allow you time to assess what you can afford and to deal with your priority debts. It also means you won’t have to deal with your creditors and debt collectors. A DMP is often the best solution to short term financial problems where debts are relatively low.