Debt management plans are meant to be flexible to life's occasional ups and downs. There's still a chance that other issues can creep in that might make being on a DMP difficult, however. Let's take a look at some common issues that you should try and steer clear of while on your DMP.
Not sticking to your budget
When you had your initial debt advice session, we put together a budget to show where your money needs to go every month. In order to keep your DMP running smoothly, you need to stick to the living expenses outlined in your budget. There are plenty of budgeting apps you can use to help keep track of your day to day spending.
If you find the budget we put together doesn’t match the amounts you have to spend each month, get back in touch with us and we can update it.
Not letting us know when things change
Sometimes things can happen ‘out of the blue’ and make life a bit difficult. Big life changes such as redundancy, marriage, divorce or a new baby can all affect the amount you have available to pay to your debts.
If anything changes about your income or your circumstances, let us know so we can make sure the DMP is still right for you.
Taking out more credit during your DMP
When you enter into a DMP, it’s with the understanding that you won’t take out any more credit products while you’re paying off your existing debts. Taking out more credit is likely to prolong the problem rather than make things easier for you.
If you find yourself dealing with an unexpected expense such as boiler repairs or replacing an appliance, please call us before deciding on how you’ll pay for these things.
Not allocating money for sundries and emergencies
When we put together your budget, we added a section for sundries and emergencies. This was so you could put aside a certain amount of money every month to cover these expenses.
It’s important that you don’t spend the money meant to cover these costs, just in case the unexpected does happen. Putting it in a separate bank account - or even in a jam jar - is a good way of ensuring that this money is available if you need it.
Not treating your creditors equally
Sometimes creditors will contact you during your DMP to ask for an increased payment. Some may even try to persuade you to pay them extra directly, outside of your DMP.
If this happens, explain that you’re paying the most you can realistically manage through your DMP. Don’t be tempted to pay them extra – if you do, there’s a risk you won’t be left with enough to cover your household bills and other living costs.
If you find you have a bit extra available one month and you want to pay more to your creditors, get in touch with us for advice on the best way to use the money.
Not asking for help
As we’ve already mentioned, we have a dedicated team of advisors who are here to answer your questions and ensure that your DMP is working for you. The majority of problems can be resolved by staying in touch with us. You can access OnlineDMP at any time. Most of the information you may need can be found on the existing DMP clients page. Our MoneyAware team are also on hand to give you great budgeting and moneysaving tips.
In addition to our support, you can also speak to people just like you who are currently dealing with debts via a DMP on MoneySavingExpert.com’s DMP and mutual support forum thread.