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There could be a number of reasons why you may be struggling with DMP payments. If you find yourself in this situation, there are some solutions available that will help to make things more manageable. Read on below to see what you can do if you are finding it difficult to maintain your current debt management plan schedule.
Assess your current living expenses
If you are struggling with DMP payments, the first thing to do is to review your income against your current financial commitments.
Spending on things such as electricity and gas bills, to travel and food costs can fluctuate during the course of any given year. Some of this can often be out of your control, as usage levels change and prices are raised by individual companies.
You may also have experienced a fall in income, which could mean you are struggling to maintain your agreed DMP payments. This could be anything from being made redundant, to changing to a job with a lower wage, or reducing the number of hours you are working each month.
Sometimes you may have to deal with an unexpected cost, such as repairing a car, or hiring a tradesperson to fix an issue with your home. Depending on the cost, it could have an effect on your ability to maintain creditor payments.
Whatever the reason for the change in circumstance, the first thing to do is to confirm how much money you expect to receive each month and assess the level of disposable income available to offer to creditors after accounting for priority bill payments and essential living costs.
Request to reduce DMP payments
Once you have reviewed your current living expenses, get in contact with your credit counselling agency to discuss your options.
Your DMP should be reviewed at least once a year by the agency, as creditors will want to check whether the information you provided 12 months ago has changed. If you are able to afford to repay more, they could expect you to increase your payments. They may also anticipate that in some cases you may have to reduce payments due to changes to your circumstances.
The credit counselling agency will want to go through your new budget plan in detail to ensure you are comfortable with everything you have included. Once finalised, they will forward this onto the creditors and await their response.
If you do have to reduce your DMP payments, you should also be aware that it may take longer for you to pay off your debts.
Requesting a payment break
Depending on how much your income has dropped and the amount of money owed, you may want to consider applying for a DMP payment break.
A DMP payment break works in the same way as a mortgage holiday, where an agreement is made with creditors to halt payments for a short period of time if you are experiencing a temporary cash-flow problem.
While there is no guarantee creditors will agree to this request, it could be an option they consider. It is important to remember that if they do agree, the money will still be payable and either added as an extension to the end of the contract or spread across the remaining instalments once you return to making payments, increasing the amount that has to be paid.
What to do if you have missed a payment?
If, for whatever reason, you have missed at least one DMP payment, you should get in touch with your credit counselling agency as soon as possible.
While you may be concerned about how creditors will react to a missed payment, it is important to address the situation quickly to find a workable solution. If not, it could snowball into a larger problem that is more difficult to resolve and the DMP can fail.
Even if you have missed a DMP payment, the credit counselling agency dealing with your account may be able to negotiate with your creditors and offer assurances.
The worst case scenario could be that the creditors decide to no longer accept your DMP and restart requests for you to repay the outstanding debts either in full, or at the minimum amounts set out in the original credit agreements.
The most important thing to remember is not to avoid dealing with any missed or late payments for your DMP plan. The creditors will not forget the money is overdue and the sooner the issue is broached, the easier it will be to find a solution that works for both parties.