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Token payment plan. Is a TPP right for you?

If your situation changes dramatically, it can be hard to make any sort of payment towards your debts. A token payment plan (TPP) could be the temporary support you need to get your situation back on track. In exceptional circumstances you may also be recommended a token payment plan even if your situation isn't going to improve. If this is the case, one of our advisors will explain why in more detail.

If your situation changes, for example you’re made redundant or you’re starting maternity leave, it can be stressful dealing with your debts when you've got less money coming in. With a token payment plan you pay £1 a month to each of your creditors until your situation improves enough to increase your payment.

A TPP isn’t a long-term debt solution, and won't help you repay your debts. But it could give you the breathing space you need. We’ll then help you find a more permanent solution to repay your debts.

Token payment plans at a glance

StepChange TPP benefits Risks
You make one monthly payment to us and we send this to your creditors. We won't charge you a fee for doing this. We can only offer a TPP if your situation is likely to improve within the next 12 months.
You’ll only be asked to pay £1 a month for each of the debts you have. For example, if you have six debts you’ll pay £6. We’ll only set up a TPP if you don’t have enough money available to look at other debt solutions, like a debt management plan.
If you've fallen behind with any of your priority household bills, we'll help you deal with these as part of your TPP. A TPP is not a long term solution. It can only be offered to you if your situation is going to improve, or in exceptional circumstances.

Your creditors don’t have to agree to reduced payments through a TPP, but even if they don't we'll still make your payments to them.

There will also be a period of time while the plan is set up before we make payments on your behalf. Making reduced payments to your creditors also increases the possibility of falling into further arrears and your debt total could increase, which is why a TPP is not a long-term debt solution.

Making reduced payments will affect your credit rating and you'll find it more difficult to get further credit.

Is a token payment plan suitable for me?

A TPP is a temporary plan. We can only set one up if your income is only just covering the payments towards your household bills (so you've got nothing left over at the end of each month) and your situation is going to improve within the next 12 months.

We may also recommend a TPP in exceptional circumstances, even when your situation isn’t likely to improve.

Your situation could be improving because:

  • You have a payment that is due to finish, which will free up money in your budget. This could be paying off arrears on your rent or mortgage, or finishing a hire purchase agreement
  • Your situation will change, for example if you’re looking for work or you’ll return to work after maternity leave
How does a TPP help me?

A TPP takes the stress out of dealing with your creditors and gives you breathing space while you get back on your feet. Once your situation has improved we’ll review your budget and talk to you about the options available to help you deal with your debts.

What should I do if I've fallen behind with my household bills?

If you've fallen behind with your priority household bills (like gas, electricity or mortgage) and built up arrears then we can add these onto your TPP so that you can pay them something towards your arrears in your monthly TPP payment.

This will help reduce the pressure you're under as you'll just make one payment to us and we'll help you deal with your priority household bills as well as your unsecured debts.

When your situation improves you can increase the payment you're making to get your household bills up to date as quickly as possible.

Why can’t you offer everyone a TPP?

A TPP isn’t a long term debt solution. If you can only afford £1 a month to your unsecured debts and nothing in your situation is due to change we will advise you on more suitable debt solutions.

What next? Find out if a TPP is right for you

  1. The first step is to put a budget together so we can see what's best for you. If you haven't already received advice from us, you can do this online using our Debt Remedy tool, or by speaking to one of our advisors
  2. If you fit the criteria for a TPP we can set it up and contact your creditors
  3. When your situation is due to change we’ll contact you to review your budget and discuss your long-term options

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Why chose us?

We are the UK's leading debt advice charity.

  • We'll support youAnd help you manage paying token payments to your creditors until your situation improves.
  • Expert advisors We have advisors who are experts in debt law. They'll be on hand to help you every step of the way.

Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

*This is the average rating of our service based on the StepChange reviews on Feefo by DMP and DRO clients three months into their solution.

© StepChange Debt Charity 2018