DMP FAQs

We know that debt solutions can feel confusing, so we have put together this list of common queries, to help you find the answers to any questions you may have about Debt Management Plans.

ABOUT DMPs

What is a DMP?
What are the pros and cons of a DMP?
Is a DMP the right debt solution for me?
What is the process of setting up a DMP?
Which debts can be included in a DMP?
Can a DMP protect your assets?
Is a debt management plan a loan?
Are debt management plans legally binding?
Can I enter into a Debt Management Plan (DMP) if I already have a CCJ?
I live in Scotland. Am I able to take out a DMP?

SETTING UP A DMP

How much does it cost to set up a DMP?
How are DMP payments worked out?
How do I make my DMP payments?
How long will my DMP last?
Can I stop my Debt Management Plan when I like?

HELP DURING YOUR DMP

What support do I get during my Debt Management Plan (DMP)?
Will interest and charges be frozen during my DMP?

LIFE WITH A DMP

How much will each of my creditors receive?
Will I have to live on a tight budget during my DMP?
Will I have to tell my partner about my DMP?

YOUR CREDIT FILE

Does a DMP affect my credit rating?
How long does a DMP stay on my credit file?
Can I continue to use credit while I have a DMP?

MOVING FROM OTHER DMP PROVIDERS

Can I move an existing DMP to PayPlan?
My DMP company is closing. What can I do?

DEALING WITH CREDITORS

Who informs my creditors of the DMP?
Will my creditors agree to my DMP payments?
Will I still receive calls and letters during the term of the DMP?
How will I know my creditors are being paid through my DMP?
Can my creditors still issue me with a County Court Judgment (CCJ)?
Will I get a default notice with a DMP?

Content for all of the above FAQ sections is shown below:

ABOUT DMPs

What is a DMP?

Visit our What is a DMP page to find out all about Debt Management Plans.

What are the pros and cons of a DMP?

Visit our DMPs at a glance page to see a full list of the pros and cons of DMPs.

Is a DMP the right debt solution for me?

This page provides advice on when a DMP might be the right debt solution for your needs. We will always carry out a full assessment of your specific circumstances, however, to ensure we recommend the most appropriate solution to get you debt-free. To speak to our experts, call FREE now on 0808 278 3071 from 8am to 8pm Monday to Friday, or 9am to 3pm on Saturday. Alternatively, complete our enquiry form and we will be in touch as soon as possible.

What is the process of setting up a DMP?

Our page The DMP process explained clearly walks you through the process of setting up a DMP.

Which debts can be included in a DMP?

Only unsecured debts can be included in a DMP. For more information on this, visit our page Which debts can be included in a DMP?

Can a DMP protect your assets?

Visit our Can a DMP protect your assets? page to find out whether a DMP can help protect your home and vehicles.

Is a Debt Management Plan a loan?

No, a DMP allows you to repay your debts at an affordable rate, by setting up an informal arrangement with your creditors to make a reduced payment each month. Some creditors may also agree to freeze interest and charges, helping you to get debt-free more quickly.

If you use a debt management company such as PayPlan , it won’t buy the debt from your original creditors, nor give you money to pay off your debts.

Are debt management plans legally binding?

No, a DMP is not legally binding – it is an informal arrangement.

Can I enter into a Debt Management Plan (DMP) if I already have a CCJ?

CCJs don’t prevent you from entering into a DMP. When your DMP is being set up, you will provide details of your CCJ and PayPlan will then prioritise payments to any creditors who have issued you with a CCJ when distributing your monthly payments.

I live in Scotland. Am I able to take out a DMP?

Yes, Scottish residents can take out a DMP and can also benefit from a government-backed initiative called a Debt Arrangement Scheme. (DAS). It allows for the repayment of debts over a longer period of time, with all interest, fees and charges being frozen during the period. To find out more about this scheme, call PayPlan FREE on 0808 223 0490, or contact us online and one of our advisors will call you back.

SETTING UP A DMP

How much does it cost to set up a DMP?

Debt Management Plans are set up and managed free of charge by PayPlan . Many other providers charge a set up fee or monthly fee, and often both, so it’s important to understand all charges before you enter a plan. When you enter a DMP with PayPlan, every penny that you pay each month goes towards paying off your debts.

How are DMP payments worked out?

Visit our How your DMP payment is worked out page to find out how monthly payments are calculated.

How do I make my DMP payments?

During your DMP, you will pay a regular monthly payment to PayPlan by Direct Debit (the easiest and preferred method), or by standing order. You can also make a debit card payment or bank transfer if these methods are more convenient.

How long will my DMP last?

The length of your DMP depends on your level of debt, how much you can afford to repay each month and whether your creditors agree to freeze interest and charges.

The term of your DMP may change as you progress through your DMP. For example, if your circumstances change and you can afford to pay more, your DMP will reduce in length. Conversely, if your circumstances worsen and you can only afford lower payments, the length of your DMP will be extended.

Can I stop my Debt Management Plan when I like?

Because it’s an informal arrangement, you are free to stop a DMP at any time; however creditors may well resume interest and charges (had they been previously frozen them), if you cancel a plan.

If you find you cannot afford the DMP payments, please talk to us first before cancelling your plan, as we can reassess your circumstances and see if we can find another solution for you.

HELP DURING YOUR DMP

What support do I get during my Debt Management Plan (DMP)?

Our website contains a wealth of resources to support you on your journey to debt freedom; from initial information about the debt solutions available, through to practical support such as money saving tips, and relevant news.

Choose a debt solution with us and you’ll also benefit from PayPlan Plus , our unique members area that allows you to manage your debt solution online, and provides specialist tools to help you budget while you are on the journey to debt freedom.

Will interest and charges be frozen during my DMP?

It is not possible for any debt management company to guarantee to freeze interest and charges during your DMP, so we recommend that you exercise caution with any that make this claim.

At PayPlan , you can be assured that we will contact to your creditors and ask them to freeze any interest and charges. In our experience, this involves presenting them with a realistic income and expenditure report, which we create with you. We will notify you of the outcome of these communications so you are aware.

LIFE WITH A DMP

How much will each of my creditors receive?

Each of your creditors will receive a proportion of your monthly payment that is equal to the same percentage of your total debt that you owe to them. To see a working example of this, see our Example DMPs page.

Will I have to live on a tight budget during my DMP?

When we are negotiating your DMP with creditors, we submit your income and expenditure details to them, and it’s in your interest if we can show that you are prepared to make some sacrifices to help repay your debts.

Before setting your monthly payment amount, we will fully review your circumstances with you and discuss together what a realistic and achievable budget for you would be.

Will I have to tell my partner about my DMP?

Our service is confidential, so we will never force you to tell your partner about your debt solution. Whenever we contact you, we would not share the reason for the call with anyone but you.

Furthermore, as DMPs are informal arrangements, there is no public record of you entering into a DMP for anyone such as a partner or spouse to find. If an employer does a credit check, they may see DMP markers on your credit file.

YOUR CREDIT FILE

Does a DMP affect my credit rating?

For full information on how a DMP affects your credit rating, visit our How does a DMP impact on your credit rating? page.

How long does a DMP stay on my credit file?

Visit our page How long does a DMP stay on your credit file? to find out how long you can expect a DMP to show on your file.

Can I continue to use credit while I have a DMP?

It can be considered fraudulent to take out credit that you know can’t be repaid, and it would be irresponsible for PayPlan to support you taking out further credit.

The Debt Management Plan that PayPlan arranges for you will ensure you have enough money to live on , so you shouldn’t need to take out any more credit. There are some exceptions, such as insurance and mobile phone contracts. For further advice on these, visit our page How does a DMP impact your credit rating?

MOVING FROM OTHER DMP PROVIDERS

Can I move an existing DMP to PayPlan?

Yes you can – to find out more visit our page Moving an existing DMP to PayPlan.

My DMP company is closing. What can I do?

Dont’ worry, it’s possible to simply move your DMP to PayPlan. For more information on this, visit our page Moving an existing DMP to PayPlan.

DEALING WITH CREDITORS

Who informs my creditors of the DMP?

One of the benefits of a PayPlan DMP is that we will deal with your creditors on your behalf. We will explain your situation, show them your income and expenditure and make an offer of payment to them. If your situation changes, we will contact them and renegotiate the payment amount.

Will my creditors agree to my DMP payments?

Creditors don’t have to agree to the Debt Management Plan payments in order for us to send them money on your behalf. Creditors know that you can only afford to pay what is affordable to you, as calculated by PayPlan in partnership with you. Some may try to employ techniques to try and get you to increase your payment, and we can advise you if and when this happens.

For over 20 years we have worked with a large number of creditors on behalf of our clients and we’ve got a great record in securing agreement from them and in many cases, getting interest and charges frozen.

Will I still receive calls and letters during the term of the DMP?

As a DMP is an informal arrangement, your creditors are still entitled to contact you directly, however we hope to reduce communication from them to a minimum.

One of the major benefits of being a PayPlan client is that we will speak to all of your unsecured creditors for you, so if you have had correspondence that concerns you, you only need to contact us and we’ll provide advice or follow it up with your creditors if necessary.

How will I know my creditors are being paid through my DMP?

All of our clients get exclusive and free access to our PayPlan Plus secure website. This allows you to manage your debt solution, including viewing exact details of DMP payments we have received from you and made to your creditors on behalf.

Creditors may occasionally contact you to say that they haven’t received a payment, which may be an error with their systems, but could also be a ruse to try to get you to pay more money. If your creditors contact you to say your payment has not been made, simply contact PayPlan and we will investigate for you to ensure you don’t make overpayments.

Can my creditors still issue me with a County Court Judgment (CCJ)?

Debt Management Plans are not legally binding, so creditors are able to take action against you, however in our experience, this is unlikely to happen if you keep up the monthly payments in your DMP.

If a creditor were to apply to the court for a CCJ, then of course PayPlan would continue to support and advise you, and help you to find a solution that suits your specific needs.

Will I get a default notice with a DMP?

If you make changes to your creditor payments, whether by negotiating reduced payments yourself or entering a debt management plan, the payments will be less than in your original credit agreement and therefore your creditors can issue a default notice.

It is possible for this to happen even if you have not missed any payments under your DMP, but it doesn’t necessarily mean the creditor will take legal action. The default will, however, appear on your credit file for 6 years from the date it was issued.

If you have any queries about default notices, please contact us online or by phone FREE on 0800 316 1833 and our team will be happy to help.