Debt management plans
Encyclopedia
A Debt Management Plan (DMP) is a method used in various countries for paying personal unsecured debts. Typically, such debts are out of control – payments are late and/or take too large a portion of income
, or even exceed it. A DMP usually involves a third party organization that looks at all or some of the debts, assessing income and budget, and re-negotiating interest rates and payments with the lenders. The negotiated rates and payment plan is based upon the probability of a higher likelihood of collection by the lenders in light of the debtor's more realistic monthly repayment.
Some debts have priority over others and not all are amenable to participating in a DMP. Money left over after dealing with these debts and priority expenses may be suitable for a DMP
Income
Income is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings...
, or even exceed it. A DMP usually involves a third party organization that looks at all or some of the debts, assessing income and budget, and re-negotiating interest rates and payments with the lenders. The negotiated rates and payment plan is based upon the probability of a higher likelihood of collection by the lenders in light of the debtor's more realistic monthly repayment.
Some debts have priority over others and not all are amenable to participating in a DMP. Money left over after dealing with these debts and priority expenses may be suitable for a DMP
External links
- How to sort out your debts - Citizens Advice BureauCitizens Advice BureauA Citizens Advice Bureau is one of a network of independent charities throughout the UK that give free, confidential information and advice to help people with their money, legal, consumer and other problems....
- Scottish Debt Arrangement Scheme - Debt Arrangement Scheme
- Debt Management Plan - Debt Management Plan - By definition