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Whilst utilising a Debt Management Plan

Finding it difficult to make repayments on your debt management plan

You could find yourself in the difficult position of having acquired a debt management plan (DMP), struggling to obtain the money necessary each month to adhere to your reduced repayment schedule. If this situation applies to you, it is imperative that you are proactive and take measures to address the situation immediately. If you simply choose to neglect the problem and allow the situation to escalate, then you could find yourself in a worse position than you were before you managed to obtain the debt management plan.

The following guide you clearly out to you the steps you should take if you are finding it difficult to adhere to the repayment schedule outlined in your debt management plan.

If you’re in a DMP, it’s normally not a good idea to take on any more debt, such as an overdraft or credit card.

If you feel that you need to take on more debt, for example if you’ve had some unexpected costs such as urgent repairs to your home, talk to your DMP provider first. They may be able to re-negotiate your DMP payments which would leave you with more money to pay for your other costs.

Key advice

When on a debt management plan, it is strongly advised that you avoid seeking the acquisition of further liabilities, like overdraft, credit card or payday loan debt. Even though it might seem plausible as a measure to use in order to make your new reduced repayments on time, it can often result in your problems worsening as the house of cards you build eventually falls down when your initial problems relapse.

If you believe that you need to attain further debt, for example you’ve been subjected to some surprising additional expenses or require repair work to your property, get into contact with your debt management plan creditors first. You can then see if you can come to a new repayment arrangement that enables you to have enough money to pay for these without taking out more debt and still have sufficient disposable income to make your payments on time.

Which reasons are behind your difficulties to repay on time?

There could be a multitude of circumstances that could result in you finding it exceedingly difficult to make your debt management plan monthly repayments in full or on time. These include:

  • A sudden change in your personal situation, such as being made redundant unexpectedly or being diagnosed with a debilitating and long term illness.
  • You’ve acquired further liabilities since the beginning of your DMP.
  • Unexpected occurrences, such as damage to your property or car which need urgent repair.
  • The size of your debts to your ‘priority’ lenders, like your secured loan providers or landlords, have been raised, meaning that you have a lower than forecasted level of disposable income to address non-priority debts.

Regardless of the reasons behind your difficulty to adhere to your debt management plan repayment arrangement, you should get into contact with your relevant lenders straight away and alert them of the situation, because you may find that they are content to alter your deal and tailor it in order to reflect your new circumstances.

If you make a late payment or miss a repayment date

If you have had a debt management plan arrangement enacted and miss a payment date, then it is imperative that you get into contact with your debt management plan supplier straight away. Failing to adhere to your DMP payment dates inevitably means that your lenders do not obtain the regular repayments they expected of you and indeed based their decision to accept your arrangement on. This could result in them opting to end your debt management plan and put you back into the situation you were before you acquired one.

Again, if you are aware that you’ve failed to make a payment on time, or missed it all together, you will need to be proactive and call your DMP supplier up as soon as possible in order to resolve the issue. They could ensure that the situation is remedying by re-negotiating with your lenders and maintain the DMP arrangement, potentially with different terms if you desire them.

Can you lower the monthly repayments even more?

The total sum you contribute toward your debt management plan each month isn’t necessarily concrete and if you are finding it difficult to make the payments on your new schedule and arrangement on time, then it is possible to lower these monthly repayments further upon negotiation.

However, it is worth considering that if you do manage to lower your monthly contributions even more, it will take far longer to repay your debt off in full.

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