Can I go on holiday once in a Debt Management plan?

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Being in debt and in a plan such as a Debt Management Plan (DMP) or an Individual Voluntary Arrangement (IVA) can mean that many will have to change the way in which they spend and make cut backs. Many of these cut backs will come from areas of your budget which may be deemed as a luxury or non-essential.

Holidays are seen as a luxury to your creditors who will want to see that you are paying all that you can into your plan. For this reason we are unable to allow an expense in your budget to save for a holiday.

With this being said, people in a plan with us do still go on holiday.

If you want to look at the possibility of going on holiday whilst in a plan then you could consider one of the following:

*Collect vouchers from newspapers, magazines or the internet that offer discounts or cheap holidays to bring the cost down.

*book self-catering holidays

*set yourself a daily spend limit so that you do not live beyond your means whilst on holiday

Remember it is extremely important that you maintain payments into your plan at all times. Failure to do so could result in your creditors rejecting your repayment plan for a DMP or can lead to the failure of your IVA.

Budgeting tips with a DMP

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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.

Can I go on holiday once in a Debt Management plan?

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Can I go on holiday once in a Debt Management plan?

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