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Debt collection process when on a DMP

Because you’re making reduced payments to your debts, your creditors will follow a collection process. This process normally follows these steps:

  • Your creditors will call you and send you letters asking you to pay the outstanding arrears. If you don’t pay, these will become more threatening. Your account may be dealt with by the creditor’s collection department.
  • You will be sent a default notice if you miss a number of payments (usually between 3 and 6) and if the debt is regulated by the Consumer Credit Act. If you can’t pay, the agreement is then cancelled.
  • Once you’ve received a default notice your debt may be sold to a debt collection agency.
  • The debt collection agency will call you and send you letters to persuade you to pay a certain amount each month. You don’t need to do this. Just maintain your normal DMP payment, and we’ll pay this to the debt collection agency. You should let us know that your debt has been transferred. 
  • The creditor can take you to court if they're not happy with the amount you're paying. Call us straight away if you get any court paperwork in the post. 

Whatever your creditors say or do, the important thing is to make your DMP payment each month.

Dealing with creditors

The success of your DMP depends on a good relationship between you, your creditors and us.

You shouldn’t be afraid to discuss your situation, or your DMP, directly with your creditors. This shows them that you’re taking responsibility for your financial situation.

FAQs

Bailiffs can only get involved if court action has been taken and you haven't made the payments the court instructed. If this has happened, please contact us as soon as possible for help.

It's common for creditors to talk about sending debt collectors to your home as this puts pressure on you to make extra payments. But it's very unlikely that a creditor would send one to your home as it's expensive and the debt collector has no legal powers.

You'll normally be sent a default notice if you're making reduced payments to your debts. Unless you can pay all your arrears and return to the full payments you agreed when you first took out the debt, there's nothing you can do to stop the default notice. You should continue to make your regular DMP payment.

Nothing. They can speak to you about your situation, but they can't enter your home or take any goods from you. They must leave if you ask them to. You dont even have to speak to them if you dont want to.

Debt collectors do not have any legal powers and shouldn't be confused with bailiffs. Most creditors don't visit you at home, and prefer to phone you or write to you.

Yes. In England, Wales or Northern Ireland if you owe more than £5,000 to a creditor (if you live in Scotland and you owe more than £3,000), they can make you bankrupt. This is very rare, especially when your making a monthly payment through a DMP. If a creditor is threatening to bankrupt you, please contact us for further advice. Find out more about creditors applying for bankruptcy.

No. It's very unlikely that your creditors will agree to write off your debts. This only happens in situations where there is no chance the debt could ever be paid, for example they may consider it for a person with terminally ill person with no monthly surplus and no assets.

Don't pay anything directly to your creditors. The success of your DMP depends on all creditors being treated fairly and making extra payments to one is unfair to the others.