Benefits of a Debt Management Plan

A DMP combines multiple unsecured debts into one monthly payment.

Instead of managing several payments to different creditors, you make one payment based on your income and essential living costs. This can make things simpler and easier to manage.

Because your payment is lower than your original agreements, your credit rating is likely to be affected.

Your monthly payment is calculated using your budget.

We look at your income and essential spending — such as rent, bills and food — to make sure your payment is realistic and manageable. This helps ensure you’re not using money needed for everyday living to repay your debts.

Because you’re paying less each month, it may take longer to repay your debts and could cost more overall.

We’ll ask your creditors to freeze interest and charges when setting up your plan.

They don’t have to do this, but many do. If interest and charges are frozen, it can stop your debts from increasing while you repay them.

Managing multiple creditors can be stressful, especially if you’re already struggling financially.

With a DMP, we deal with your creditors on your behalf. Find out more about how we negotiate with your creditors. This includes:

• making repayment offers
• managing ongoing communication
• resolving issues and queries

Some creditors may still contact you directly, but you can let them know you’re on a DMP with Money Advisory Centre and pass the details to us.

You could choose to manage your debts yourself if you’re confident working out what you can afford, negotiating with your creditors, making multiple payments each month and dealing with any issues that come up. We do this for you as part of our service, which is why we charge a fee.

A DMP is not legally binding, which means it can be adjusted if your situation changes.

If your income goes down or your expenses increase, your payment can be reviewed and reduced. If your situation improves, you may be able to increase your payments and clear your debts quicker.

We’ll look to agree any changes with your creditors.

We’ll support you throughout your DMP.

If you have questions, concerns, or changes in your circumstances, we’re here to help. We’ll review your plan at least once a year to make sure it continues to work for you.

A DMP can be a helpful way to manage your debts, but it’s not right for everyone.

• It may take longer to repay your debts
• You could pay more overall
• Your credit rating will be affected

There may be other options available depending on your situation.