Setting Up an Atlantic DMP

If you're interested in setting up a Debt Management Plan here's what to do.

Firstly, we need to know about all your income and outgoings. We do this with a document called a statement of affairs, and we can complete this with you over the phone. All our advisers are understanding, discrete and trained to prepare your statement-of-affairs in a common format understood by your creditors.

We'll then work out how much money you need for living expenses each month as well as your priority payments, including any arrears. From what's left we'll calculate what you can afford to pay to all your unsecured creditors. We also have an expert legal support team who can help you deal with any court actions you may be facing, such as CCJs.

Once you've agreed with our calculations we make proposals to each of your creditors to arrange your new repayment schedule. We'll also see if they will freeze any interest and charges they're making on your debts – we have a very good record of doing this. This is where we can really make a difference – it's quite common for people to have missed payments or only be paying the minimum contractual payments on credit card debts – and that would take decades to clear these debts.

There are set-up fees for creating your DMP and then a monthly management fee. All you have to do is make your payment to us – from this, we pay each of your creditors and deduct our monthly management fee. We send you a monthly statement so you know exactly who is getting what.

Illustration of an Atlantic Debt Management Plan (DMP)

Employed couple who are homeowners in their late thirties with equity exceeding total unsecured debts of £24,927 with 7 creditors and no savings. Current contractual payments equate to approximately 3% of the total debt balance, equating to £748, and they have started to miss contractual payments. Their mortgage and other priority payments are up-to-date.

They have several credit card debts and these would take over a decade to be cleared at minimum contractual payment [assuming no further usage] with an UK average APR of over 18%.

Using the Common Financial Statement (CFS), the couple's disposable income (DI) is estimated to be £294, where monthly repayments would be reduced by £454 to a level they can afford.

Fees are applicable for setting up and managing the DMP, which are VAT exempt.

A set-up fee of £657.50 would be payable and this can be collected over two monthly salary cycles. The monthly management fee is then 15% of the DI once payments are disbursed to your creditors through the Atlantic DMP.

The Atlantic DMP duration is based upon interest & charges being frozen by the creditors and the true opening debt balance being cleared over the lifetime of the DMP. The DMP would be reviewed at least annually.

Estimated DMP duration = total debt divided by (DI minus monthly management fee) + the period to pay the set-up fee, typically one month. So in this illustration:

Estimated DMP duration is £24,927 divided by 85% of DI plus one month = 100 months = 8 years, 4 months

Total estimated lifetime fees payable to Atlantic = £657.50 + £4,365.90 (99 monthly fees) = £5,023.40

Atlantic is able to negotiate Full & Final settlements on some or all of the debts under management during the course of the DMP. This can significantly reduce the duration of the DMP and the level of debt repayable. Any changes in circumstances, positive or negative, will be taken into account with regard to the repayments offered to your creditors and the duration of your DMP.

We offer a wide range of payment methods, including a Prepaid Current Account. And you'll have a Personal Case Manager throughout your DMP who will help you with any queries or advice whenever you need it. We'll also arrange regular reviews with you throughout your plan.

With Atlantic Financial Management - it couldn't be simpler!

Important points to remember:

• Whilst lenders are not obliged to freeze interest and charges, in 93% of the cases currently handled by the Pentagon Group, lenders have done so*. Where a lender does not freeze interest and charges the amount you owe and the period over which you repay that credit account may increase, though we will continue to request interest and charges be frozen once several payments have been made to your Debt Management Plan (DMP).
  * Figure accurate at the end of April 2011
• Whilst entering into a DMP can adversely affect your credit rating it is our experience that those who approach us already have an impaired credit record. By entering into a DMP you will be showing your creditors that you are taking a responsible attitude to resolving your financial problems and this could help you in the future.
• Whilst we ask your creditors for 30 days breathing space to set-up your DMP after we are appointed as your debt manager, your accounts may go into further arrears until we start disbursing payments to the creditors that you request us to act upon.
• Remember, you are not obliged to enter a debt solution with Atlantic Financial Management. If you do, and you change your mind, you have a right to cancel your agreement with us at any time. We offer a 14 day cooling off period after accepting our terms of business, unless you have elected to waive this so that we can immediately deliver the service and start negotiating with your creditors.