Debt Management Plan - A debt management plan is a popular method for dealing with personal debt which cannot be repaid. However a common concern is the effect this solution will have on the family home. We investigate how it will affect your property.
If you have debts which you are struggling to repay, a debt management plan (DMP) will help you reduce your monthly payments to an amount that you can afford.
Having said that, only unsecured debt such as personal loans, credit cards and catalogue debt can be included in a DMP.
You must continue to pay any secured debts such as your mortgage, any secured loans or a car HP. As long as you continue to pay your mortgage, your home is not at risk and you will be able to keep it.
Mortgage payments protected
Your debt management plan will actually help you maintain your mortgage payments.
This is because your mortgage is a priority debt and included in your monthly living expenditure budget which you are allowed to maintain while you are in a DMP.
Only the money left over once all of these expenses are paid can be used to make payments to your unsecured creditors.
As such, a debt management plan will ensure that you always have enough money each month to pay your mortgage.
Debt Management Plan