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This is the place to ask questions if you are already in a DMP
By Gill52
#22693
I have been in a DMP for 18 months with a company. They take a fee of £42 from my payment each month to manage the plan for me. I have decided to take over the management of the plan myself. Will it be OK if i keep the £42 per month that used to go to the company or will I have to pay it over to the creditors?
By Kelly O
#22702
When you start to deal with the creditors yourself you will need to present your financial statement to them in much the same way as your DMC would - if you have other items of expenditure you could add these in which would reduce your disposable income.

Any disposable income will be paid over to the creditors pro rata.

Good luck :-)
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By James Falla
#22770
Hi there Gill52

Kello O is right when she says that when you start managing your DMP yourself you will normally need to present an updated income and expenditure statement to your creditors. However the £42 fee you have been paying to your debt management company is not a significant amount and you could easily keep it by spreading it across your living expenses.

Having said that, because you have to pay all of your debt back in a debt management plan, it is always best to pay as much as you can each month. As such it might be sensible to simply add this £42 to the amount you pay. However a better idea would be to put aside the £42 each month and save it towards a lump sum. Eventually this lump sum could then be used to offer full and final settlements to your creditors thus paying off your debt in a faster time.
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By Hayden
#22797
Hi Gill52

I would definitely keep the £42 back and save it towards a fund for lump sum settlements. If you manage to save enough to offer 40%-50% of what you owe to any of your creditors, it is very likely that they will accept a settlement deal. Chipping away at your debt like this will help pay it off much faster. You could also use the funds you have saved in an emergency as well rather than having to miss a DMP payment.
By Gill52
#22817
Thanks all for your advice. I am going to keep the £42 back and try to save it as you have suggested. Do you think I should write to all my debts and let them know that I will be making the payments directly from now on or just make the payments without telling them?
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By Steve Jackson
#22832
Keeping the £42 back sounds like a sensible plan to me Gill52. In terms of contacting your creditors to tell them that you have taken over your plan, yes I think this would be a good idea. You should confirm to them that you will be maintaining the normal payment to them. Make sure that you contact them at least every six months. You should send them an up to date income and expenditure statement when you do so that they can see that nothing has changed.