Can a DMP protect your assets?

A Debt Management Plan won’t offer you any protection for your assets. However, it won’t directly put them at risk either.

A DMP allows you to make affordable payments to your unsecured debts. It doesn’t include secured debts like your mortgage or vehicle on finance agreements.

The amount you pay into your plan is the leftover amount after you’ve made payments to any priority or secured debts. It’s worked out based on your specific circumstances and budget. You’ll need to continue to make payments to debts secured against your assets outside of your plan. If you have any payments like these, they’ll be prioritised in your budget. As long as you stay up to date with these, it’s unlikely they’ll be at risk.

Although it rarely happens, the companies you owe money can attempt to secure their debt against your home by applying for a County Court Judgement (CCJ) and then a Charging Order against your property. If this happens, we’re here to help and support you through it.

Our experienced advisors are here to help you find the right solution for your circumstances. Call us on 0800 316 1833, message us on WhatsApp or Live Chat. Our opening hours are 8am to 8pm Monday to Friday or 9am to 3pm on Saturday. Or, complete our enquiry form, and we will be in touch as soon as possible.

FAQs

Why do I have to change my bank account?

If you have a current account with a company you owe money to, you will be required to open a new bank account. This is not only the case with a DMP but you should change your bank account if you are going to make reduced payments to a company that you also bank with. Banks have the “Right to Offset” so any money in your current account could be used to pay another debt with the bank.

Will I have to live on a tight budget during my Debt Management Plan (DMP)?

To enter into and maintain a successful Debt Management Plan you will need to live within a budget, however this is discussed with you openly. PayPlan are required to submit your income and expenditure details to your creditors.

Remember that when we’re negotiating your DMP, it is in your interest if we can show your creditors you are prepared to stick to a realistic budget to help repay your debts.

Will I have to tell my partner about the Debt Management Plan (DMP)?

We offer an absolutely confidential service from start to finish, so PayPlan will never force you to tell your partner about your debt situation, although support is available if you wish to tell them.

A DMP doesn’t usually affect your partner’s credit rating, but if you have a financial association, such as shared debts or guarantor debts, then it could do.

Whenever we contact a client we take great care to avoid divulging the nature of our call to anyone but the client.

Which debts are included in a Debt Management Plan (DMP)?

A DMP will only help you make reduced payments to your unsecured creditors, therefore the debts that can be included are:

Personal loans (loans taken to purchase cars are fine but Hire Purchase (HP) agreements cannot be included as they are secured against the item being purchased)
Credit cards
Store cards
Catalogues
Overdrafts

Secured debts can’t be included in DMPs because any payments on secured debts that aren’t met in full, can lead to the goods being repossessed. This website provides details on house repossession and car repossession, which are all consequences of not maintaining mortgage or hire purchase payments.

Is my home at risk if I enter into a Debt Management Plan (DMP)?

A Debt Management Plan is an informal arrangement which is not legally binding and although having a DMP could reduce the chance that the property would be at risk, there is a chance a creditor could take legal action such as securing a charging order on the property. This would secure the debt and a creditor could force the sale of the property at any point during a debt management.