FAQs | DMC Debt Management (2024)

FAQs

What is a disadvantage of a debt management plan? ›

The cons of Debt Management Plans

Creditors require the accounts to be closed in order to be put on a DMP. This can slightly lower your credit score, because closing multiple accounts at the same time affects the length of your credit history.

DMPs don't include priority debts. These are debts that have been secured against your home and other assets, as well as utility bills or Council Tax. You'll need to prioritise payments to these in your budget.

An outsourced debt is one which a credit provider (such as a bank, lender, municipality or retailer) has requested DMC to collect on its behalf. DMC does not own the debt, but can still offer a simple, fair and trusted way to resolve it.

While you can continue using credit cards that aren't in your DMP, it may not be the best decision. If you are not careful, you could end up accumulating more debt. This added financial burden could strain your budget and make it challenging to meet your monthly DMP obligations.

Even if you're in a DMP, your creditors may still record that you've missed payments, as you'll be paying less than you agreed to when you took out the original credit agreement. This will mean you could find it harder to get credit while you're making reduced payments and for some time afterwards.

The idea of having a notation on your credit history may initially send up red flags. But while a debt management plan does affect your credit history, it does not have a lasting negative effect on your credit score.

Debt collectors cannot harass or abuse you. They cannot swear, threaten to illegally harm you or your property, threaten you with illegal actions, or falsely threaten you with actions they do not intend to take.

Include all of your debts.

Make sure all of your debts are included in the DMP, even if you think you can manage that catalogue payment or want to keep your overdraft 'for emergencies'. Sometimes you might have missed a debt from your plan, so be sure to let your DMP provider know about any changes as soon as possible.

Your Bank Account & A Debt Management Plan

In conclusion, a Debt Management Plan (DMP) does not directly affect your bank account. You can usually continue using your current bank account as usual when you enter a DMP providing that you do not wish to include a debt on your DMP that is with your bank account provider.

DMC is a registered credit provider with NCRCP No. 103. We are fully compliant with the National Credit Act of South Africa. This Act protects ordinary South Africans by regulating debt collection practices and ensuring consumers are treated fairly.

How do I check my DMC balance? ›

View and download your latest account statement and paid up letters on DMCOnline. Simply login with your ID number and click on the account you want your letter for and follow the on screen prompts.

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Debt management plans (DMP) are flexible. This means you may be able to pay off a DMP early. You can do this by increasing monthly payments or paying a lump sum.

A DMP may be a good option if the following apply to you: you can afford your living costs and have a way to deal with any priority debts, but you're struggling to keep up with your credit cards and loans. you'd like someone to deal with your creditors for you.

Creditors are not legally required to settle for less than you owe. Stopping payments on your bills (as most debt relief companies suggest) will damage your credit score. Debt settlement companies can charge fees. If over $600 is settled, the IRS will view this debt as a taxable income.

The accounts you are repaying your DMP through will already be listed on your credit report, and once the DMP is complete the marker will be removed and the accounts themselves will be marked as closed – they will then remain listed for six years from the settled date.