A Debt Management Plan (also referred to as a DMP) is a method of repaying your unsecured creditors a monthly amount that you can realistically afford. At Grass Roots we will negotiate on your behalf and set up the agreements with your unsecured creditors.

The main benefits of a DMP (Debt Management Plan) are:

• Our experienced negotiators deal with your creditors on your behalf.
• You pay one realistic and affordable monthly amount to Grass Roots and we handle paying your (unsecured) creditors from this.
• The DMP is not legally binding on you, so you have the flexibility to increase your payments or even pay creditors directly if your circumstances improve in the future (subject to Minimum Term with Grass Roots).

A DMP (Debt Management Plan) is designed to pay your unsecured creditors with your surplus income; this is the money remaining after you have paid for your food, priority debts and household bills and any essential goods or services.

A DMP (Debt Management Plan) will help you deal with all of your unsecured debts.
Examples of these are: unsecured personal loans, credit cards, store cards, catalogues, overdrafts.

A DMP (Debt Management Plan) only deals with your unsecured debts. It cannot deal with priority debts or secured debts. Secured debts are debts where non-payment will result in repossession of goods or property. Priority debts are debts owed to Government bodies or for services essential to living. Examples of these are: mortgage or rent arrears, utility bill arrears, hire purchase, Her Majesty's Revenue and Customs taxes, government bills and County Court Judgments.

However, as a result of the DMP reducing your overall monthly payments to your unsecured creditors, you will have sufficient income left over for you to pay your secured and priority debts. By making just one payment to Grass Roots in respect of your unsecured debts, planning your finances to ensure your secured and priority debts can be paid on time also becomes easier.

Each DMP (Debt Management Plan) is individual and the length depends on your level of debt and your level of monthly repayment. If you miss any monthly payments and the creditors do not stop interest or charges then the term will be extended. However, if your circumstances improve in the future, or your debts are written off or cleared via other means, then the term will be reduced.

No. Our experienced negotiators contact your creditors in writing and verbally to negotiate a reduction in the monthly payments. We explain that you have entered a DMP (Debt Management Plan), aim to ensure an agreement is reached and ask them to communicate directly with us. Sometimes creditors will use ‘underhand’ tactics to try to convince you to pay them directly; if this happens please refuse to pay them and tell them to contact us.

Your creditors are not legally bound to accept our repayment proposals for a DMP (Debt Management Plan). However, due to the fact that we demonstrate the proposals are fair and affordable, most proposals are accepted. In rare cases where they are not, we request that the debt to be handed to a third party who should accept the proposal. During this handover period we will continue to pay the creditor the amount stated in your plan.

By law, the the creditor is obliged to issue a default notice (as per their T&Cs), as you will have defaulted on the original contract. This is standard procedure. There is no need to be alarmed and we should be contacted immediately so that we can take the appropriate  action and assist as required.

The creditor is entitled to to take legal action if you have missed payments. However, the DMP (Debt Management Plan) renegotiates your payment agreements with your creditors and as long as you maintain payments into the DMP they are unlikely to pursue a County Court Judgment.

Your creditors may try to contact you even after they have agreed to the reduced monthly payments in the DMP (Debt Management Plan). However, contact should be greatly reduced and you can always ask them to contact us directly. Any letters you receive should be forwarded to us to deal with.

Your credit rating may still be harmed. However, entering a DMP usually means you are missing payments anyway. The structure of a DMP and the fact that it has been agreed with your creditors means that the effect on your credit rating may not as bad as 'leaving things as they are'.

Yes. As the DMP (Debt Management Plan) will negotiate reduced payments to your bank debt, it is best to open a new account with a new bank. Your bank may try to offset the reduced payments by taking extra money from your bank account. Additionally, if you have had problems maintaining payments to your bank debts they will internally grade you as a credit risk and this often affects their service levels.

No. As long as you maintain your required monthly mortgage or rent payments. A DMP (Debt Management Plan) is designed to alleviate the financial pressure you are under and ensure that you have the available income to pay your priority debts and secured lending.

Property costs such as rent or mortgage payments are priority expenditure and are more important than your unsecured debts, hence the calculations for what you pay into the DMP account for the payment of priority debts such as rent and mortgage that need to be made 'first' by you. Only your surplus income, remaining after these priority debts and reasonable living expenses have been accounted for, is paid into the DMP and distributed amongst your unsecured, non-priority creditors.