Not enough in your budget for essentials: When you first put your budget together, you may have thought you needed less money to cover essentials such as food, clothing, toiletries and travel.
You’re by no means alone. Many clients are willing to make sacrifices to pay more towards their DMP. However, we recommend reducing your spending where possible while still being realistic about your essentials.
Your creditors wouldn’t expect you to do without the things you need. If you need more money to cover your essentials each month, we can review your budget.
Leaving a debt out of your budget: You must include all of your unsecured debts in your budget. If you leave any out, the creditors you haven’t included in the plan are likely to continue expecting the minimum payment on your debt. What’s more, you may struggle to pay this separate debt because it hasn’t been included in the budget you put together.
If you include all of your debts, your creditors will have a better understanding of your situation and are more likely to support your DMP. Also, including every debt means you only have to make one payment a month, instead of several payments.
It’s easy to forget a debt, especially if you’ve lost the paperwork or haven’t heard from the creditor in a while. One way to find information on all your debts is to access your credit file. You can do this online, for free through the one of the three credit reference agencies in the UK.
If you’ve forgotten to add a debt to your DMP you'll need to let your DMP provider know as soon as possible.
If it’s been longer than six years since you made a payment to this debt, it could be classed as ‘statute barred’.
This means your creditor can't force you to pay it.
Missing several DMP payments: If you find yourself dealing with an unexpected expense, such as a broken boiler or car repairs, you may be unable to make your monthly DMP payment.
Although we wouldn’t usually cancel your plan for one missed payment, especially if it’s due to circumstances outside of your control, other providers may. However, if you regularly miss your DMP payments, we may have no choice but to cancel your DMP.
Failing to review your budget on time: Without reviewing your DMP regularly, there's no way of knowing it’s still the best solution for you.
The Financial Conduct Authority (FCA) states that we must review your DMP together at least once a year. If you’re not sure when your next review is due, don’t worry. We’ll send you a letter, email or SMS advising you when it’s due. If, however, we don’t hear from you, our last resort may be to close your DMP.
Taking out credit during your DMP: Using credit during your DMP is against the terms of our plan, and may result in it being closed.
It's also a sign that your budget might not be accurate, as all of your spending should be accounted for, and there should be no need to continue borrowing.
If a creditor rejects my DMP, does that mean it's failing?
For the most part, creditors tend to accept the amount you’re able to pay them through a DMP, as it’s an accurate reflection of what you can afford at the moment.
If for some reason a creditor doesn’t accept your DMP payment, this doesn’t mean that your plan’s failing. It just means that they don’t feel that your current payment offer will be suitable in the long-term.