Can a creditor question or challenge an area of spending in my budget?
When a DMP provider puts a budget together with you, the budget is based on the Standard Financial Statement (SFS). This is a set of rules agreed on each year by Money Helper, formerly the Money and Pensions Service, the banking sector, and debt advice providers such as StepChange Debt Charity.
The SFS guidelines ensure that you have enough money to cover your priority living expenses and daily costs. They also ensure that any debts you have are treated fairly in line with the figures included in your budget. SFS member creditors are more likely to accept a budget that has been put together using SFS guidelines.
If there’s an area on your budget where the spending is above the recommended amount, your creditors may ask you to explain why this is. Your DMP provider will usually place a comment on your budget to explain the costs. This extra information helps understand your situation and decide whether to accept your offer.
In some cases your creditor may ask for proof that this is the amount you spend. It's up to you whether or not you give them this information, as it shouldn't affect your DMP. However, giving some context behind the amounts in your budget it may make the creditor more likely to accept your payment offer. For this reason, it can be useful to keep copies of your receipts, bills and bank statements.
Should a creditor query a figure in your budget, it's recommended that you're as open as possible about why it's higher than expected. If the increase is beneficial to your daily life, such as high petrol costs due to living in a rural area where there's limited public transport, your creditors should be understanding.
If after you explain the increase they tell you that they still don't agree, get in touch with your DMP provider who'll be able to look at your options.
In addition to several consumer credit lenders, other bodies such as local authorities are members of the Standard Financial Statement scheme. You can check the online SFS directory to see if any particular creditor is a member.
Creditors can continue to call or write to you during your DMP. In practice, you can expect contact from creditors to reduce as long as you stick to the payments.
Contact from creditors is more likely:
- In the early stages of your DMP
- If you miss any payments during your DMP
- At points when creditors want to check if anything has changed (typically every six or twelve months)
Creditors have to send you some letters by law, and these will continue if you’re on a DMP. Examples include annual statements for some types of debt, or default notices.
If a creditor is still contacting you a lot, or pressuring you to increase your payments or pay them extra outside the plan, then let your DMP provider know.
Can I send letters from creditors to my DMP provider?
Yes, although it will be safer to scan or take a photo of letters you receive from creditors, and send them as an email attachment. There’s a risk of letters getting lost or delayed if you send them by post. If you have to send documents by post, it’s best to make photocopies of the letters and send them by recorded delivery if possible.
Call your DMP provider if you’re worried or confused by creditor letters. They’ll explain what they mean and what you need to do next.
Can my DMP provider force creditors to stop contacting me?
Your DMP provider can’t force creditors to stop contacting you. However, they’ll usually try to convince your creditors to reduce contact.
Most creditors tend to limit contact once they know you have a debt solution in place. They may still contact you just before you’re due to review your DMP. If this happens, let them know your DMP provider will be in touch once the review is complete.
Can I complain about creditors contacting me?
If you feel stressed due to creditor contact by telephone, you can politely ask that the creditor removes your number from their records. If contact persists, you do have the right to make a complaint.
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