Debt Management Plan Sample Letter Templates
For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
Are you having trouble talking to your creditors about a Debt Management Plan (DMP)?
You’re not alone; this is a common worry for many people trying to sort out their debts. In fact, every month, over 170,000 people visit our website for advice on debt solutions.
In this article, we’ll show you:
- How to inform your creditors that you’re setting up a DMP
- Ways to stop frequent calls from creditors
- How you might be able to write off some debt
- How to make a settlement offer in a letter
- What to do if you’re struggling with unaffordable debt
Many of us have been in your shoes before, dealing with money worries and trying to negotiate with creditors. We understand what you’re going through, and we’re here to help you take control of your situation.
So, let’s get started with understanding how to write effective letters for your DMP.
Informing Creditors That I’m Setting Up a Debt Management Plan
Once you’ve chosen a DMP provider or a debt management company to set up your debt management plan, you’re going to need some time to get your affairs in order.
It’s crucial that your creditors don’t take any legal action against you while your DMP is being set up. This is why it’s generally a good idea to inform your creditors that you’re in the process of setting up a DMP.
You can inform them of this via a letter. A sample letter is given below:
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[Your creditor’s name and address:] Account No: [Your name and address:] Date: To whom it may concern I have been seeking advice from [your DMP provider] and they have suggested to me that a debt management plan would be the best course of action for me. I am currently going through financial difficulties and I’m not able to meet my regular monthly payments. [Your DMP provider] is setting up a debt management plan for me. They will send you the payment offer for the DMP within a few days. It will include details of what my monthly payments will look like as well as my budget and a list of my creditors. I’m hoping that my financial situation will improve over the next year. When it does, I will contact [your DMP provider] for further debt advice. I’m authorising you to disclose my account information to [Your DMP provider]. You can contact them at [Your DMP provider’s contact number]. Yours faithfully [Your name] |
» TAKE ACTION NOW: Fill out the short debt form
Sending a Letter for a Settlement Offer
DMPs can last a very long time. Some of them can exceed even 10 years depending on the amount of debts you have and what your monthly payments towards your debts are like.
So, during this long time, there’s a chance that you may run into a substantial amount of money that you could utilise for a full and final settlement offer.
A full and final settlement offer would involve you paying a single lump sum payment to your creditors in order to take care of your debts once and for all.
The lump sum payment doesn’t have to be equal or higher than the amount of debts you actually owe. Your creditors will most likely agree to write off the remaining debt in exchange for the fact that they would instantly be recovering money from you rather than in small monthly payments.
You can write to your creditors to inform them that you want to do this. A sample letter for this is given below:
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[Your creditor’s name and address:] Account No: [Your name and address:] Date: To whom it may concern I am currently unable to meet my monthly payments but I have managed to raise some money by [source of your lump sum payment] I am offering [amount] as a full and final settlement in order to clear my outstanding debts with you. Please consider my offer and let me know what you think. Yours faithfully [Your name] |
How a debt solution could help
Some debt solutions can:
- Stop nasty calls from creditors
- Freeze interest and charges
- Reduce your monthly payments
A few debt solutions can even result in writing off some of your debt.
Here’s an example:
Situation
| Monthly income | £2,504 |
| Monthly expenses | £2,345 |
| Total debt | £32,049 |
Monthly debt repayments
| Before | £587 |
| After | £158 |
£429 reduction in monthly payments
If you want to learn what debt solutions are available to you, click the button below to get started.
Sending a Letter to Stop Frequent Calls
Once a debt management plan is put in place, you should expect less contact from your creditors.
That being said, your creditors are not legally prevented from contacting you if a DMP is put in place.
In most cases, your creditors won’t contact you as long as you’re making your payments on time. However, if you start missing your payments or pay them late, then you may start getting calls from them.
Even in that case, if the calls are too excessive or if they’re calling you at irregular times (late at night or on the weekends), then you have the right to ask them to cease their calls.
Alternatively, your creditor may have hired a debt collection agency to recover their debt from you. You may still be getting calls from these debt collectors even though you’ve entered into a DMP. In that case, you’re going to have to contact your creditors and ask them to call off the debt collector(s).
You can do so by writing a letter to your creditor(s). A sample letter is given below:
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[Your creditor’s name and address:] Account No: [Your name and address:] Date: To whom it may concern I am writing to you to complain about the frequency as well as the inappropriate times at which I’m getting telephone calls from you. They are causing me a considerable amount of stress and I would like you to cease calling me in order to inquire about my payments. Kindly remove my contact number from your database and send all future messages in the form of letters to my home address. If you don’t cease calling me, I’ll have to contact the Financial Ombudsman Service to log a formal complaint. Please respond with a letter confirming that you have updated your records and removed my contact number from your database. Yours faithfully [Your name] |
Conclusion
I’ve laid out some letter templates for some common situations that may arise during your DMP.
For other situations, you can contact your DMP provider and ask them for debt advice on how to write your letter(s) regarding your debt to your creditor(s).
You can also seek debt advice from independent charities such as Stepchange or National Debtline. Just ensure that whatever agency you seek advice from is authorised and regulated by the Financial Conduct Authority (FCA).
