Who will find out about my Debt Management Plan
Debt problems can be embarrassing. You may feel that in some way you have failed. Given this you may not want other people to know about your situation. It is therefore important to understand who will find out if you start a Debt Management Plan (DMP). One of the benefits of this solution is that it is private. There is no public register of people who are in these Plans. As such there is really no way that anyone will be able to find out about your circumstances unless you chose to tell them.
Will my Family find out about my Debt Management Plan?
None of your family or friends will be able to find out that you are in a Debt Management Plan unless you chose to tell them. As such it is possible to hide your Plan even from close family members if you want to. Having said that you need to remember that it will normally take 2-3 months for your creditors to agree to your payments. During this time you are likely to receive lots of payment demand letters and telephone calls. Theses might be difficult to hide from your partner or explain away.
DM4U Tip: Generally speaking it is always best to tell your partner or spouse if you are struggling with debt. They may be shocked initially but it will be much easier for you to maintain your Plan payments with their support. If they do not understand why you are having to live within a budget they may become frustrated with your reluctance to spend money.
Will my Bank find out I have a Debt Management Plan?
Whether or not your bank will find out about your Plan will depend on whether you owe them money and whether you decide to include this debt in the arrangement. Clearly if you do owe your bank money and you include them they will find out. To ensure your ongoing income is protected from the banks right of set off you will normally need to open a new account with a different bank.
DM4U tip: If you open a new bank account to use while you are in a Debt Management Plan there is no reason to tell your new bank about your financial difficulties. They will not be able to find out that you are in a Plan. Having said that if your accounts are already in arrears you will need to mention that your credit rating is poor. As such they may only offer you simple banking facilities.
Will my Landlord or Mortgage Company find out about my Debt Management 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. You must make sure that you continue to pay your rent or mortgage while you are in your Plan. Sufficient funds to cover these payments must be included in your living expenses budget.
The only time when you need to worry about your Plan 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.
DM4U Tip: If you have been in your Plan for over a year it may be possible to get a new mortgage. However this will largely depend on whether you can show that you have maintained your payments on time and have received no further default notices or County Court Judgments.
Will my Employer find out about my Debt Management Plan?
Your employer will never be told by anyone that you are in a Debt Management Plan. It is therefore very unlikely that they will ever find out. If you have changed your bank account you will have to ask your employer to change the account into which your wages are paid. However even then there sound be no reason for them to suspect that you have financial difficulties.
The only time you need to think carefully about your employer is if you have a job which requires you to have a clean credit file. Your credit file will be negatively affected by the Plan. If your employer carries out a credit check against you they will discover your poor credit rating which could then affect your job.
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