Debt Management Plan.

Mortgage
Having a DMP in place can make it difficult to get a mortgage. The reason for this is that payments towards your debts will show on your credit file, and this may be used against you in a mortgage application.

Remortgage
Similarly, it can be difficult to remortgage your existing home on a DMP, though there are options depending on the length of your current plan. If your mortgage plan expires, your current lender will likely offer their standard variable rate. While not the best deal, it will allow you to continue making repayments.

Renting
Renting, on the other hand, should be more straightforward. If you keep your rent payments up-to-date and pay off any rental debts that you may have, then a DMP shouldn’t affect your current tenancy.

While a Debt Management Plan can’t guarantee that bailiffs will no longer come to your door, having an agreed repayment plan in place could help keep your assets safe.

As bailiffs are typically a last resort for lenders, setting up a Debt Management Plan is usually an indication that you plan to repay your debts, and should reduce the risk of legal force.

This depends on your monthly repayment amount, interest and charges (if applicable), and your personal circumstances. The actual amount of time your plan will last could change if your personal circumstances change.

For example, if your income increases, you could increase your payments and reduce the length of your plan. However, if something changes and you need to reduce your payments, this will extend the length of the plan.

DMPs are quite flexible, so you may find that you’re able to pay it off earlier by increasing your monthly payments or paying a lump sum.

If your personal circumstances change and you find yourself coming into money, our internal Settlements Team can help you to get an early settlement figure, which could see you settle your debt for less.

A Debt Management Plan will usually lower your credit score as you’ll be paying it back more slowly and in smaller instalments. Potential lenders will therefore see that your debts are being settled this way and may be more reluctant to give you a loan.

Any debts you have will stay on your credit file for six years after the date they’re paid off or defaulted. It is important to note, however, that your DMP won’t be recorded as a separate entry. Instead, creditors may add a marker to show you’re paying back through a DMP.

Taking out further credit while on a DMP would impact your monthly expenditure, and could make repayments unaffordable.

When using our DMP services, our expert advisors will help you to set up a realistic monthly budget, which will account for all regular, day-to-day costs that are likely to pop up. We’ll make sure you are left with enough money to cover all of your daily expenses, reducing the need to borrow money.

If you do need to take out a new credit agreement, the lender will run a credit check. Due to the impact on your credit file of making reduced payments, you may be charged a higher interest rate for the credit you take out, or refused credit altogether.

Taking out further credit while on a DMP would impact your monthly expenditure, and could make repayments unaffordable.

When using our DMP services, our expert advisors will help you to set up a realistic monthly budget, which will account for all regular, day-to-day costs that are likely to pop up. We’ll make sure you are left with enough money to cover all of your daily expenses, reducing the need to borrow money.

If you do need to take out a new credit agreement, the lender will run a credit check. Due to the impact on your credit file of making reduced payments, you may be charged a higher interest rate for the credit you take out, or refused credit altogether.

A debt plan review is a regular check to make sure your debt solution still fits your current situation. If you’re on a DMP or another managed debt solution, your provider will look at whether anything has changed in your finances over the past 12 months.

You’ll be asked to share up-to-date details of your income, living costs and any new debts. This helps your adviser check if your monthly payment is still affordable and fair for both you and your creditors. If your circumstances have changed, your payments might be adjusted.

This yearly review is an important part of keeping your plan on track. It makes sure you’re not paying more than you can manage and helps your creditors stay on board. Your adviser will guide you through the process and explain what’s needed, so you’re fully supported at every step.

Payment break limits can vary depending on your individual circumstances and your creditors’ policies. If you’re on a DMP, a payment break may be allowed if you’re experiencing short-term financial difficulty, such as a drop in income or an unexpected expense.

There’s no fixed number of times you can request a payment break, but each request is reviewed carefully to make sure it’s appropriate and necessary. Your adviser will look at your budget and situation before contacting creditors to ask for their agreement.