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Managing a DMP

Debt management plans and job loss or redundancy

Being made redundant or losing your job while on a debt management plan can be worrying.  However, it’s important to remember that a DMP is a flexible solution.

There are three simple steps you can take when dealing with redundancy to help keep your DMP on track.

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Do your research

As you go through the process, you’ll need to understand your redundancy rights as well as what your options are. It’s also worth checking if you’re entitled to any benefits to top up your income. You can use an online benefits calculator to do this.

Review your budget

You should always make sure you have enough money to pay for all your essential household and living costs before you make any payments to your debts. Although you may have every intention of securing a new job as soon as possible, life doesn’t always go the way you plan. With this in mind, look at spending in your budget that you could trim in the short term.

You could try downshifting to supermarket own-label foods or switching to a cheaper supermarket. Or, just while you're looking for a new job could you skip your next haircut, or cancel things such satellite TV packages, streaming services or gym memberships.

Complete a review

A DMP is a flexible solution so if you experience a change in circumstances, even if it may only be for the short term, it’s important you contact your DMP provider as soon as possible and complete a review. You’ll create a new household budget and review the payment you’re making to ensure it’s still affordable.

If we’re your DMP provider, please get in touch with us as soon as possible so we can help adjust your DMP. If you’re worried about speaking to us, we understand and we want you to know, we’re here to support you. However, if you prefer, you can update your plan by logging onto Online DMP. 

It’s better to complete a review and adjust your budget rather than trying to stick to your current payments. Although it may be tempting, please don’t take out any further credit to support your income during this time. If your DMP is with us, you’ll be breaking the terms of our agreement which could cause your DMP to fail.

Common redundancy and DMP questions

Will I have to give up any redundancy settlement I’m entitled to, to pay my debts?

No. Any settlement you’re entitled to from the redundancy should be treated as income and not an asset.

What happens if I can no longer afford my DMP?

Once you complete a review with your DMP provider, they’ll be able to tell you if a DMP is still the most suitable debt solution for your situation.

If it’s not, they’ll explain what your other options are including any benefits or risks you need to know about before making your decision.

Will my creditors be upset if I make changes to my DMP?

Your creditors know that a DMP is a flexible solution that’s designed to be affordable.  Because of this, they expect your budget to be reviewed every year or when you experience a change in circumstances.

If your DMP provider needs to make any adjustments to your plan, they should inform your creditors on your behalf.

It is possible that some creditors may take further action if your payment is reduced, such as passing the debt onto a collection agency or sending a default notice. If this happens, there’s no need to worry. Just inform your DMP provider as soon as possible so they can continue sending your payments to the right place.