To be eligible for a CVPP, you must be able to pay a reasonable amount of what would be your normal contractual payments. Credit commitments include:
- Credit cards
- Personal loans
- Store cards
- Pay day loans
- Catalogue accounts
If you have a guarantor loan, or a debt jointly owed between you and another person, your creditor may ask the loan’s guarantor or the other person to repay the debt.
Some debts are a priority because the consequences of not paying them are greater than the consequences of not paying others.
For example, if you don’t pay your rent or your mortgage you could lose your home. You must always pay these before your other debts.
Priority arrears must be paid in full within the 12 months of your CVPP. These include:
- Council tax
- Other priority arrears not connected to housing or assets
It’s important that you continue to maintain all payments to any:
- Commitments you’ve not told us about
- Essential household bills, such as your mortgage or rent and utility bills
- Child support you pay
- Court fines you have outstanding
- Taxes you must pay
Not maintaining these payments could result in action against you.
Your creditors could try to recover the debt, you may lose access to essential goods or services or the goods could be repossessed.
You may be evicted if you don’t keep up to date with your mortgage, secured loan or rent payments.
If you have an overdraft on your existing bank account, you should aim to reduce the balance on this during the course of your CVPP. While there’s no ability to add an overdraft to a CVPP, reducing an overdraft reduces any interest and charges you have to pay for it, to positively help your financial situation.
The following debts can't be included in a CVPP:
- Mortgages and mortgage arrears
- Rent and rent arrears
- Secured loans
- Hire purchases and hire purchase arrears
- Benefit overpayment repayments
- CCJs / decrees
- Child maintenance arrears
- Insurance arrears
- TV licence arrears
- Business debts, including credit cards and loans used for a business
There are other options available to you if you have debts that can't be included in a CVPP.
If you're struggling to make payments towards these debts, you should speak to your creditor as soon as possible.
You can also use our online debt advice tool to find the right solution for your situation.