FAQs

If you alter or adjust your creditor payments, whether that is by negotiating reduced payments yourself or by entering into a debt management plan, your creditors can issue a default notice. Although you are still making monthly repayments, the payment is likely to be less than you originally agreed to pay when you entered the original credit agreement. A default notice can be issued at any point during your arrangement even if you are maintaining the terms of your renewed agreement.

If you receive a default notice, it doesn’t automatically mean the creditor is going to take legal action. The default will appear on your credit file for 6 years from the date it was issued.

If you have any doubts or queries about default notices, then please contact us and we’ll explain everything in detail.

Due to a Debt Management Plan being an informal arrangement, your creditors are still entitled to contact you directly, so PayPlan cannot guarantee that all letters and phone calls will stop immediately, but we can hope to reduce communication to a minimum. If you do receive any correspondence from your creditors that concerns you while you’re in a PayPlan DMP, simply contact us and we will be more than happy to provide you with further information and will, if necessary, speak to your creditors on your behalf. We will speak to all your unsecured creditors whenever we need to. This is one of the major benefits of being a PayPlan client.

A DMP in itself will not show on your credit file, however, if you have recently been experiencing financial difficulty (missed repayments) then your credit rating is likely to have been affected already by this.

To explain this further; if you’re paying less than your creditor’s contractual payment when in a DMP, you won’t be complying with the original credit agreement so your credit rating is likely to be affected.

A Debt Management Plan is an informal arrangement between you and your creditors, so you are free to stop the Debt Management Plan at any time, but we ask that you provide as much notice as possible.

If you are experiencing further financial problems and cannot afford the current DMP payments to PayPlan, please let us know because we may be able to reassess your circumstances and see if another solution might be available to you.

Please note: Bear in mind that once the DMP is cancelled, creditors may well resume interest and charges if they were frozen in the DMP.

During the term of your Debt Management Plan you’ll pay monthly using one of two methods:

• Standing Order 
• Direct Debit (this is the easiest and preferred method)

This depends on two things; your surplus income (i.e. the money you have left over every month after paying all your living expenses), and how much you owe each creditor.

For example:

If you had three Creditors, as below:

If your surplus income = £153 per month, then the pro-rata payments to each creditor will be:

We will pay the agreed amount each month to each of your creditors, on your behalf, with no fees taken out.