FAQs

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.

Nothing if you choose PayPlan, it’s completely free.

As you may know there are many debt management companies that charge by either requiring a start up fee or a monthly management fee, which can be anything from 15% – 17% of the monthly payment.

We are funded by the credit industry and we receive donations for providing this service to you.

This is what allows us to offer completely free Debt Management Plans. So whatever you can afford to pay each month goes directly to your creditors to reduce your level of debt even quicker.

For example if you can afford to repay £250p/m all of that money will be distributed to your creditors pro rata, PayPlan takes no fees from your payment and the full £250 per month will go towards paying your creditors off.

Please think very carefully before signing up with a fee-charging company, because PayPlan can offer this service for free!

The length of your Debt Management Plan depends on your individual situation.

It depends on your level of debt and how much you can afford to repay each month.

If creditors do freeze interest and charges with creditors, the length of your Debt Management Plan can be dramatically reduced.

For example: If you owe £25,000 and you can afford to pay £250 per calendar month the DMP will last for just over 8 years (100 months). This applies only if the payments are maintained each month and the creditors freeze interest for the duration of the plan. (Don’t forget, your DMP can be completed sooner if your circumstances improve and your payments can be increased. Likewise if you circumstances worsen the duration of your DMP will be extended.)

No, a debt management plan is a way for you to repay your debts at an affordable rate.

A debt management company such as PayPlan doesn’t buy the debt from your original creditors, nor do they give you money to cover your existing debts.

A PayPlan DMP helps you to manage your debts by offering a reduced payment to each of your creditors, and we also request that they freeze interest and charges to help you get debt-free quicker.

A Debt Management Plan (also known as a DMP) is a debt solution for anyone who has unsecured debts that they can’t afford to repay.

If you owe money to more than one creditor and you have a surplus income each month (that is, money left over after you have paid all of your living costs & household bills from your income) then a DMP could be a great debt solution for you.

With a DMP, you pay all of your unsecured debts back, but at a more affordable rate.

You may still be able to trade from leased premises if you enter a Self-Employed IVA.

However, there are a couple of things you’ll need to do:

• Read the lease agreement carefully. In some cases, the lease may state that it’ll be terminated if you enter an IVA or bankruptcy. If your lease does state this, discuss your financial situation with the landlord of the property, and ask whether they’ll actually use their right to terminate the lease if you enter a Self-Employed IVA. If they agree not to terminate the lease, it’s important to get confirmation of this in writing.
• Check that you aren’t in arrears with payments under the lease agreement, as this could result in the landlord not allowing you to keep the property.

There will be an allowance in your cashflow to make your lease payments when they fall due – plus repayment of any arrears – so the landlord can see that you intend to keep up with your payments.

Even if the above termination clause is in your lease agreement, the fact that you’re taking action to deal with your debts may convince the landlord to ignore this and allow you to continue trading from the premises.