News Categories

• Banking
• Breakdown Cover
• Car Insurance
• Credit Cards
• Home Insurance
• Insurance
• Life Insurance
• Loans
• Money
• Mortgages
• Pensions
• Pet Insurance
• Travel Insurance

News Archive

• February 2012
• January 2012
• December 2011
• November 2011
• October 2011
• September 2011
• August 2011
• July 2011
• June 2011
• May 2011
• April 2011
• March 2011

Newsletter

DMP 'not suitable for all'

By Sarah Engle, Mon 8 Mar 2010 - Published in Loans

New figures from insolvency trade body R3 claim that 26 per cent of debt management plans (DMPs) will not be cleared after ten years or more.

Research from the group also showed that 46 per cent of insolvency practitioners have seen the plans fail because their monthly repayments were too high for clients to meet, while 52 per cent believe creditors have "pushed" people into the agreements.

In addition, 35 per cent of people using a DMP reported that other debt solutions, such as bankruptcy or an individual voluntary agreement, were not considered before they started their plan.

Peter Sargent, president of R3, said the plans are useful for some people who have debts which are at a level they can manage to pay back.

He added: "However, the sheer length of some plans indicates that the amount of debt these individuals have is too large for a DMP."

Ed Bowsher, head of consumer finance at lovemoney.com, recently said that there needs to be more financial education in the UK to reduce the amount of debt people are willing accumulate.