Example DMPs

While you could set up a DMP yourself, PayPlan takes the headache of this away because a DMP with PayPlan is FREE to set up and all payments are also administered for FREE, ensuring all of your payment goes towards getting you out of debt.

As an example, imagine Mr X had a debt of £8,474. Following a full assessment of his income and priority payments each month such as his mortgage, vehicle hire purchase payment, household bills and food expenses, PayPlan established that Mr X can comfortably afford a monthly payment of £153 per month. The table below shows how the payment to each of his creditors is calculated:

Creditor	Amount of debt	% of overall debt	Amount of DMP payment received
Credit card	£1,525.32	18%	£27.54/month
Store card	£1,779.54	21%	£32.13/month
Bank loan	£5,169.14	61%	£93.33/month
Total	£8,474		£153/month

If you choose PayPlan for your DMP , you pay your agreed DMP payment each month to us, and we will distribute this free of charge to your creditors.

PayPlan has helped over a million people become debt free. While every case is different, the chart below shows the significant difference that managing their debts through a DMP has made to four genuine PayPlan clients.

Thinking about a DMP but unsure what’s right for you?

Get free debt advice online or call 0800 316 1833 to speak to one of our experts. We’ll explain the solutions available, check what you may be eligible for and help you choose the option that best fits your situation.

See if a DMP is right for me

Table of contents

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.

FAQs

Why do I have to change my bank account?

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

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)?

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

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

Example DMPs

Thinking about a DMP but unsure what’s right for you?

FAQs

FAQs

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