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Debts included in a Debt Management Plan

Debts included in a Debt Management Plan

Most debts can be included in a debt management plan. However some have to be left out.

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Debts which can be included in a Debt Management Plan

Which debts have to be left out?

There are some debts that cannot normally be included in a Debt Management Plan. The most common are where a County Court Judgement (CCJ) has already been issued, debt you owe to HMRC and secured debts such as a mortgage or secured loan.

Secured debts
Debts that are secured against property such as a mortgage, secured loan or car finance agreement cannot be included in a DMP. If you do not keep up the agreed payments towards these debts it is likely that the property they are secured against will be repossessed. When you are putting together your living expenses budget it is important that you provision sufficient amounts to maintain the payments towards all of your secured debts. If after doing this you have no disposable income left to pay into a DMP then you may have to consider a different debt solution.

Mortgage and rent arrears

DM4U Tip: If you are struggling to pay your mortgage a DMP may still be able to help. Using a Plan to reduce the payments you have to make towards your unsecured debts might free up sufficient funds to enable you to pay your mortgage on time.

County Court Judgment (CCJ) debts
If a County Court Judgement (CCJ) has already been issued against one of your unsecured debts it will be difficult to include this in your DMP. You have two options as far as this type of debt is concerned. The first is to leave it out of your Plan altogether. However you must then make a provision in your living expenses budget to cover the amount you must pay towards the debt each month. If this is not possible because it means that you are left with little or no money to pay into your DMP you will need to apply to the court to reduce the amount you to pay towards the CCJ.

Can money owed to HMRC be included in a DMP

HMRC debts
If you owe money to HMRC in the form of unpaid tax or VAT it is very unusual that you will be able to include this in your DMP. HMRC will normally require debt owed to them to be repaid within 12 months (sometimes they will agree 24 months). Given that your Plan is likely to last far longer than this it will normally not be acceptable to them.

You will normally have to make a provision to pay an amount in your living expenses budget which meets HMRC’s requirement. If you are unable to meet the payment demands of HMRC or doing so means that you have nothing left to pay into your Debt Management Plan you may have to consider an alternative debt solution.

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