Debt management plans and your creditors

My creditor will not accept my DMP payments

DMP payments tend to be less than what you agreed to repay to your creditor. This means they may not accept the offer.

Do not worry if this happens.

• It means they do not want to agree the payment amount as a long-term solution to your debt
• They often pass the debt to collectors if they do not accept your offer

This can be discouraging, but keep making payments.

• They should still accept money through your DMP even if they do not like it
• Contact your DMP provider if they do not accept payment

Your DMP payments are based on what you can afford after your priority bills and living costs are paid.

Do not offer more if the people you owe say "no" to the first amount. This could mean you cannot pay important bills.

Contact your DMP provider for support.

Can a creditor question or challenge an area of spending in my budget?

Budgets made with DMP providers are based on the Standard Financial Statement (SFS).

The SFS is a set of rules agreed each year by:

• Money Helper, formerly the Money and Pensions Service
• The banking sector
• Debt advice providers, like us

The SFS guides make sure:

• People have enough money to cover priority living costs and daily costs
• Debts are treated fairly

SFS members are more likely to accept budgets based on SFS rules.

If your budget has an area of spending that is higher than recommended:

• The people you owe may ask why
• You DMP provider will  put in a comment explaining it

This helps the people you owe to:

• Understand your situation and
• Decide whether they accept your offer

They may ask for proof that you spend this much. It is up to you whether to give it to them. It should not affect your DMP.

• Showing proof may help them accept your payment offer
• Keep copies of receipts, bills and bank statements for this

It is best to be open about why spending is high if they question something in your budget.

They should be understanding if it ties in to your daily life. Like high petrol costs in places with no public transport.

Get in touch with your DMP provider to look at options if they do not agree.

Check the online SFS directory to see which lenders and public bodies are SFS scheme members.

Will creditors contact me while I am on a DMP?

The people you owe can call or write to you during your DMP. But it should get less if you stick to the payments.

Contact from creditors is more likely:

• In the early stages of your DMP
• If you miss any payments
• When they check if anything has changed (every six or twelve months)

There are some letters they have to send you by law. These are things like:

• Annual statements for some types of debt
• Default notices

Tell your DMP provider if a creditor is:

• Contacting you a lot
• Pressuring you to increase your payments
• Asking you to pay them extra outside the plan

Can I send letters from creditors to my DMP provider?

Yes, but we recommend you:

• Scan or take a photo of the letters
• Send them as an email attachment

Letters can get lost or delayed if you send them by post.

If you have to send documents by post:

• Make photocopies of the letters
• Send them by recorded delivery if possible

Call your DMP provider if you are worried or confused by creditor letters.

Can my DMP provider force creditors to stop contacting me?

Your DMP provider cannot stop the people you owe contacting you. But they will ask them to reduce it.

Most creditors limit contact once they know you have a debt solution in place.

They may contact you just before you are due to review your DMP.

Tell them your DMP provider will be in touch once the review is complete.

Can I complain about creditors contacting me?

Ask them to take your number off their records.

Make a complaint if they do not stop.

Considering a DMP?

Will a DMP affect my credit file?

A DMP impacts your credit score because payments are lower than what you agreed. This means:

• Arrears build up each month
• They are recorded in the payment history on your credit report

The people you owe may add a marker to show your payments are made through a DMP.

Some accounts default while you are on a DMP. This is also recorded on your credit file.

Can you get a County Court judgment (CCJ) on a DMP?

A DMP is not based on Government legislation, so it does not protect you from legal action by your creditors.

Solutions like individual voluntary arrangements (IVA) or bankruptcy do.

It is rare to get a CCJ during your DMP if you stick to payments. But it is possible.

When you start a DMP, your provider sends the people you owe details of your:

• Income
• Household spending
• Debts

This shows them:

• You are paying the most you can afford
• Your payments are being shared out fairly

A court would use this type of information to decide how much you should pay to a CCJ. This means a CCJ payment may not be higher than the DMP payment.

A creditor may still decide to apply for a CCJ if, for example:

• They want a charging order to secure the debt against your property, or
• The CCJ gives them an extra guarantee that you will stick to the payments

A CCJ added during a DMP needs to be treated as a priority debt. The consequences of missing payments are more serious.

This means you need to make your CCJ payment even if you miss a monthly DMP payment.

Let your DMP provider know if you get a CCJ.

Is a DMP right for you?

Use our free online debt advice tool to find out.