How are Debt Management Plan payments calculated?

We start by building a clear picture of your finances.

This includes:

• your income (wages, benefits or other sources)
• your essential spending (rent or mortgage, bills, food, travel)
• your outstanding unsecured debts

This helps us understand how much you can realistically afford to pay each month without affecting your day-to-day living costs.

This is so we can make sure you’re not using money needed for everyday living to repay your debts.

You make one monthly payment to us.

We take our fee and distribute the rest between your creditors.

This means:

• you don’t need to manage multiple payments
• your payment is based on what you can afford
• your debts are repaid in a structured and consistent way

Making reduced payments can affect your credit rating, which can make it harder or more expensive to get credit in the future.

Your monthly payment is split on a pro rata basis.

This means each creditor receives a share based on the size of your debt.

For example:

• if one creditor represents 50% of your total debt, they’ll receive around 50% of your monthly payment
• smaller debts receive a smaller share

Creditors don’t have to accept reduced payments.

However, many do when they can see:

• your budget has been assessed properly
• the payment is fair
• you’re paying as much as you can realistically afford

We’ll explain your situation and work with your creditors to reach an agreement.

We’ll ask your creditors to freeze interest, charges and collection activity.

They don’t have to do this, but many do.

Your debt management budget is the plan we use to work out your monthly payment.

It shows:

• your income
• your essential spending
• what’s left to put towards your debts

This helps to make sure your payment is affordable and sustainable.

Your plan is flexible.

If your income or spending changes your payment can be reduced if needed, or increased if you’re able to pay more.

We’ll review your plan at least once a year, and you can ask for a review at any time.

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