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FAQs

Debt solutions

Our Debt Solution FAQs address the most common questions regarding our debt solutions, assisting you in understanding how they function and whether one is suitable for you.

Do I need to pay anything for the service?
No, our service is completely free, however if your creditors don’t agree to the debt write-off, we may recommend other debt solutions that may incur a fee (these will be discussed if necessary).
What if my creditors refuse the write-off?
If your creditors reject the request, don’t worry. We’ll first speak with your creditors to understand why the decision was made and what other information could be provided for them to reconsider. Then, if they are still rejecting the request, we’ll work with you to explore other debt solutions.
How long does the debt write-off process take?
In 2024, on average, it took creditors nine weeks to respond to our request for a debt write-off. It may take longer in some cases, depending on how quickly your creditors respond and the complexity of your case.
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.
What happens to my secured debt during a Debt Management Plan (DMP)?

Your secured debts (i.e. mortgage and car hire purchase) can’t be included in a Debt Management Plan; only unsecured debts can be included in a DMP. If you are unable to make the contractual payments to your secured debts you are at risk of losing the item to which the loan is secured on (e.g. the house if you default on the mortgage or the car if you default on the HP agreement).

PayPlan will ensure you include your secured debt repayments in your income and expenditure budget right from the start. This should mean you never get into arrears with your secured debts, and PayPlan strive to help you budget sensibly when you are in a DMP. This site offers further information on Mortgage Arrears, Car Repossession, and House Repossession.

Will interest and charges be frozen during my Debt Management Plan (DMP)?

No debt management company (even PayPlan) can guarantee that creditors will freeze interest and charges during your Debt Management Plan (DMP), and you should be wary of those who say they can.

We feel your best chance of achieving such a freeze is by presenting a realistic income and expenditure report to your creditors, as we would on your behalf before you begin a DMP with PayPlan.