Here are your most frequently asked questions about the wider effects a Debt Management Plan will have on your life, from your credit rating to whether you have to tell your partner.

Do I have to tell my partner?

We do believe it is always best to be honest with your partner as the emotional burden of tackling your debt whilst keeping it a secret from those you love can often be too much. However, we don’t force you to tell your partner – this is your choice.  The only exception to this rule is if you have shared debts and/or you need your partner’s income to be taken into account to support the plan.

What happens if I come into extra money whilst in a Debt Management Plan, or alternatively have less income because of unexpected circumstances?

One of the benefits of entering into a Debt Management Plan is that it offers flexibility based on your financial situation. Should your financial circumstances change for the better or worse, you can speak with a member of our team and change your plan accordingly. As long as you can continue to make a minimum payment of £70 a month, a change of circumstances would not jeopardise your plan. Alternatively, if you come into money and choose to increase your payments, enabling you to repay your debt off sooner, this can be arranged. 

Will the plan affect my credit rating?

Because coming on plan will result in you not making contracted repayments on your unsecured debts, you should expect that your credit rating will be adversely affected. However, your credit rating may already be poor if you have arrears or a history of missed or late payments. Any adverse data held about you on your credit rating is likely to affect your ability to obtain credit and/ or influence the cost of credit including a mortgage or even a mobile phone; it may also influence employer checks in certain sectors. Any Default Notices you may have are maintained for six years from the date of default.

Can I keep one of my credit cards just for emergencies and not count this debt or credit card as part of a debt consolidation programme?

No. If any of your other creditors find out that you are treating another company favourably, they will be more inclined to reject any offers made to them and may look to collect money through court action. All creditors have to be treated equally.

Will I receive a Default Notice?

By entering into a Debt Management Plan, you will be in default on your original credit agreement and your creditor will therefore be entitled to send you a Default Notice. Creditors send out Default Notices to protect their own legal position.

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Wider Implications of a Debt Management Plan

Updated on 2016-10-02T00:01:09+00:00, by Kristian Stock.