Who will find out about my debt management plan
One of the benefits of a debt management plan is that it is private. No one will find out about your plan unless you tell them because there is no public record.
Included in this article:
- Will family or friends find out about your Plan?
- Is your employer told?
- Could your bank find out?
- Will your mortgage company or landlord be told?
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Will your family or friends find out about your debt management plan?
None of your family or friends are told that you are in a debt management plan (DMP). As such, they will not find out unless you tell them.
It is therefore possible to hide your Plan from even close family members if you want.
That said, remember it will usually take 2-3 months to get agreement to your Plan from all your creditors. During this time you are likely to receive payment demand letters and telephone calls which might be difficult to hide from your partner.
It is often best to tell your partner or spouse if you are struggling with debt. Initially, they may be shocked. But it will be much easier for you to maintain your Plan payments with their support.
Is your Employer told about your Plan?
Your employer will never be told that you are in a Debt Management Plan. It is therefore very unlikely that they would find out.
If you need to change your bank account, you will have to give the new account details to them. However, even then there should be no reason for them to suspect that you have financial difficulties.
People open new bank accounts and change the details with their employers all the time.
If your employer checks your credit file as part of your contract, they will find out your poor credit rating. They may then ask questions about your situation.
Could your bank find out?
Whether or not your bank will find out about your debt management plan will depend on whether they are included.
If you don’t owe them any money, they will not be involved. As such, they are unlikely to find out and you will be able to continue using your account as normal.
Where you do have a debt with them and include this in your Plan, clearly they will find out.
In these circumstances, to ensure your ongoing income is protected from the bank’s right of set off, you will usually have to open a new account.
If you open a new basic bank account just before you start a DMP (or during your Plan) there is no need to tell your new bank about your financial difficulties.
Will your mortgage company or landlord be told about your Plan?
Because there is no public record, there is no way that either your landlord or mortgage lender will ever find out about your Debt Management Plan.
Of course, you must make sure you continue to pay your rent or mortgage while you are in the Plan. There should be no problem with this given you have included a sufficient allowance to cover the payments in your living expenses budget.
The only time when you need to worry as far as a landlord or mortgage lender is concerned is if you are planning to rent a new property or apply for a new mortgage.
Your negative credit rating will mean that you will probably fail any credit check that a prospective private landlord or mortgage lender carries out against you.
Need more help and advice with a debt management plan? Give us a call (0800 044 5407) or complete the form below. Its free and confidential.
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