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Can’t pay my DMP what can I do

Can’t pay my DMP what can I do

If you can’t pay your DMP (Debt Management Plan) don’t panic. There are different things you can do.

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Can’t pay your DMP because of a short term problem? Take a payment break

Perhaps you can’t pay your Debt Management Plan because you are facing a short term cash emergency. You might need to pay for an urgent home or car repair. Alternatively a home appliance such as washing machine or cooker may need replacing.

In these circumstances it is often possible to take a payment break from your Plan. This means you suspend your payments for a number of months to free up the cash you need. Speak to your debt management company and they should be able to help.

Don’t stop paying your Plan without speaking to your debt management company. They can then contact your creditors who should be understanding. If your the payments just stop with no warning or explanation the creditors may restart their collections actions.

If you can’t pay your DMP due to a short term cash emergency try to resist the temptation to borrow more. It will be difficult to pay off a new debt and maintain your existing Plan.

Can you reduce your payments if you can’t pay your Plan?

It is common for financial circumstances to change during a DMP. If your income has fallen or your living expenses have increased this may mean you can’t pay your Plan. If you find yourself in this situation you need to speak to your debt management company as soon as possible.

They will help you review your income and living expenses and establish your new disposable income. They will then be able to go back to your creditors and negotiate lower payments to fit your new budget.

Remember, if you reduce the amount you pay into your Plan it will increase the time it lasts. As such reducing your payments can work well if you will still be able to repay your debt in a reasonable period of time or know that your income will improve again before long. If not, as a long term solution it may not be the right option.

Reducing your debt management payments needs to be managed correctly. Don’t do it without first speaking your your debt management company.

Stop your Debt Management Plan and go Bankrupt

Your income may have fallen so much that you can’t pay a reasonable amount towards your debts any more. If this has happened you should think about stopping your debt management plan altogether and using a different solution. You are allowed to cancel a DMP at any time by simply stopping the monthly payments.

If you are not a home owner (or have little or no equity in your property) the next best option for you might be to go bankrupt. Once you are bankrupt you will not have to make further payments towards your debts if you can’t afford to. This means all the stress of your debts is taken away from you.

Of course going bankrupt sounds bad. However where you have no nothing to lose it can actually be a far better solution than a never ending debt management plan. Your credit rating is unlikely to get any worse than it currently is. All your debt will be written off and given you have little or no surplus income, after just 1 year you will be debt free.

Can’t pay your DMP and want more information about whether bankruptcy could be right for you? Give us a call (0800 044 5407) or complete the form below.

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2 thoughts on “Can’t pay my DMP what can I do

  1. Alex says:

    Hi. I’m currently in a dmp have been for 2 years but I have had to take out other loans to get by as my son was born early and I needed the money but I’m struggling to pay my other debts as well as my dmp and I just dont know what to do as I dont want to get into trouble

    1. Hi Alex

      The best thing for you to do is speak to your current DMP company about adding these new debts to your Plan. It is certainly possible to do that. Explain why you had to borrow the extra money. They should be willing to help you.

      If they are unwilling to help then clearly you can’t go on as you are. You will need to stop your current Plan and start a new one which includes all the debt. You will be able to do this no problem with another provider. If you need further help to identify a new reputable provider please come back to me and I will be happy to advise.

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