Debt Management Plans (DMP)
Debt Management Plans are aimed at consumers who are unable to maintain their monthly payments. They usually involve a payment being made to a Debt Management Company who then distribute these funds across your creditors. The payments to your creditors are less than your normal payments would be and so your credit rating will be severely affected. Your debt will also take significantly longer to be repaid.
Why are claims now being made against Debt Management Companies?
There are many reasons that a DMP may have been mis-sold. The common reasons are:
- A Debt Management Plan was not actually the best solution to your situation
- You were not told about setup fees or monthly fees
- You were not made aware that similar services can be provided free of charge
- You were not made aware of how a DMP would affect your credit rating
- You were not made told that interest and other charges would continue to be applied by your creditors
- Your DMP was not reviewed regularly to check it was still the most appropriate solution for you
- In extreme cases, your payments were not regularly distributed to your creditors