When you start a DMP, your provider will send your creditors details of your income, household spending and debts. This shows them that the amount you’re paying is the most you can realistically afford, and that your payments are being shared out fairly among your creditors.
A court would use similar information to decide how much you should pay to a CCJ, so creditors know that court action isn’t guaranteed to get them a higher payment than they’re already getting from your DMP.
However, it’s still possible that a creditor could apply for a CCJ during your DMP. For example, they may do this because they want to apply for a charging order, to secure the debt against your property, or because the CCJ gives them an extra guarantee that you’ll stick to the agreed payments.
If you have a CCJ added to a debt during your DMP, it’ll need to be treated as a priority debt because the consequences of missing payments to it become much more serious. This means that if you ever miss a monthly DMP payment you’ll still need to make sure your CCJ is paid. Should you receive a CCJ, you will need to make your DMP provider aware so it can be dealt with properly.
Is a DMP right for you?
If you’re struggling with unsecured debt then please get in touch. Our expert advisors can give you advice on dealing with arrears and getting your payments up to date. You can also use our free online debt advice tool Debt Remedy.