A self managed DMP is a Debt Management Plan you manage yourself. In this guide we will take a look at the following: –
- Look at what’s involved with a Self Managed Debt Management Plan.
- Discuss the pros and cons when you do it yourself.
- Look at other options available to you.
Self Managed DMP – What’s Involved?
I currently managed my own debt by using a self managed debt management plan. I have just over 20 debts to pay so in my case there is quite a bit of work involved. This includes: –
- Setting up payments for each debt.
- Making sure that the balance I owe is what is expected every six months
- Making changes when a debt moves to a new debt collection agency.
- Talking to the debt collection agencies with any queries or questions I have.
- Responding to letters asking for increased payments.
Most of the work starts when you set up your self managed DMP for the first time. This is because you have to draw up an income and expenditure and also send off offers of repayment letters to all the people you owe money to. If you have a lot of creditors then this can be a very tedious process.
There are certain debts you cannot include in a Debt Management Plan. For example Mortgage debt and court fines. Priority debts are also something you need to think about.
The pros and cons of setting up your own Debt Management Plan
I have been running my own Debt Management Plan for a few years now, so have a good understanding of how it works month to month.
Lets look at the good things.
- You have complete control of your debts.
- If you wish, you can prioritise one of your debts and make a bigger payment to it.
- You don’t have to pay for your Debt Management Plan when doing it yourself.
- You can respond to issues quickly with a call to a debt collection agency.
What about the bad things?
- You have to make a payment to each of your creditors separately.
- If you are unsure about something, you have nobody to turn to.
- You will have to respond to letters from your creditors.
- You have to speak to the Debt Collection Agencies which might seem daunting.
- When things change, you might have to set up new payment details.
- You need to be very organised to stay on top of things.
What other options are there?
If you are thinking about doing it yourself because your current Debt Management Plan is costing you money, then there other options which are free.
For example, StepChange Debt Charity and Payplan can offer you a free Debt Management Plan.You can find their details on the Debt Help page here at Debt Advice Blog.
They will also provide support for the duration of your plan, which should mean you have a much better chance of completing it. If you are currently paying for Debt Management and would like a free alternative, you should take a look at them.
StepChange is my number one choice and for a while I did have a Debt Management Plan with them. If you would like to find out more then please read my StepChange Review.
Setting up your own Debt Management Plan
If you would like to find out more about setting up your own debt management plan, see this guide on how to set up a debt management plan. Remember if you have any questions, please feel free to ask. I can’t guarantee I will know the answer but will do my best to help you.