Is a Debt Management Plan legally binding? How long will it last? Find out more about setting up a Debt Management Plan.
How long does a Debt Management Plan last?
Usually until all debts have been paid in full. Due to the reduced payment levels, this could be longer than the terms of the original credit agreements and may incur additional interest charged as the term of the credit agreement is extended.
Is a Debt Management Plan a loan?
A Debt Management Plan is not a loan. We do not lend you money or pay off your debts. A Debt Management Plan is a solution that allows you to repay your debt at a monthly rate that you can afford. If you fail to make payments into the plan, we cannot forward these to your creditors.
What is the difference between a secured and unsecured debt?
A secured debt is a debt secured against an asset that you own. Typical secured debts will be a mortgage, a secured loan, a car loan etc. An unsecured debt is any loan not secured on an asset, such as a bank overdraft, a personal loan, a credit card, store card etc. Debt Management Plans do not deal with secured debts (other than, sometimes, arrears).
Will I be credit checked before acceptance?
No. Since we do not lend you any money, we do not need to credit check you.
Can I come on the plan if I already have County Court Judgements (CCJs) against me?
Yes. You can even use the plan to make payments against any existing CCJs that you have. Just be sure to let us know exactly what your current situation is when you talk to us before coming onto one of our plans.
Do I have to be in full time employment?
Not at all. To be accepted onto a Debt Management Plan, you need to have a surplus of income above what you need to live on, in order to make your monthly contributions. As long as you can afford this your employment status is not an issue with regards to the security of your DMP.
Is a Debt Management Plan legally binding and what happens if I want to cancel it?
Debt Management Plans are not legally binding. A Debt Management Plan is a quick process to set up and there is no requirement to involve the courts. For people who can only afford £70-100 a month repayment, this is often a more manageable way to work towards a debt free future. Should at any time you wish to cancel your Debt Management Plan, you can do this by writing to us and giving us 28 days notice. The notice period starts from the day you write the letter to us, not from the day we receive it.