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Managing a DMP

Interest, charges and creditor contact on a DMP

A debt management plan (DMP) doesn’t stop creditors taking action to get you to repay your debt. For example, they can add further interest and charges, contact you or start court proceedings.

However while further action is possible, it’s not guaranteed to happen.

Here are some of the actions creditors could take during a debt management plan:

  • Reject your DMP offer
  • Continue to contact you
  • Add interest and charges
  • Add information to your credit file
  • Apply for a County Court judgement (CCJ)

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Stopping interest and charges on a debt management plan

At the start of your plan, we’ll ask your creditors to stop or reduce any further interest and charges.

Industry guidance to lenders says they should always ‘consider’ stopping or reducing interest for people who are in financial difficulties and trying to sort their debts out. But they’re not legally obliged to stop interest, and a DMP can’t force creditors to do this, regardless of the organisation overseeing your plan.

However, in practice most creditors will agree to stop or reduce interest and charges. Some will do this as soon as they know about the DMP, while others may wait a bit longer. It’s rare for creditors to continue charging interest over the long term during a DMP.

Debts are often passed on to debt collection companies while you’re on a DMP. Interest and charges will normally be stopped if this happens.


My creditor won’t accept my DMP payments

DMP payments are usually less than the amount you originally agreed to repay to your creditor. As a result, a creditor may contact you to say they don’t accept the offer.

If this happens, don’t worry. It just means that they’re not willing to agree to the payment amount as a long-term solution to your debt. In most cases, if a creditor says they’re not accepting your DMP offer, this will mean they’ll pass the debt to a collection agency.

Hearing or receiving this kind of response from a creditor can be discouraging, but we recommend that you continue making the payments. Don’t stop paying a debt just because the creditor says they don’t agree with the offer. They should still accept the money sent through your DMP. If they don’t, please contact your DMP provider.

The payments you make to your DMP are based on what you can realistically afford after your priority bills and living costs are accounted for. Even if a creditor doesn’t accept the amount you offer, don’t feel pressured into offering them a higher payment you can’t afford. Doing this could mean that you’re less able to pay for more important bills. If this happens, contact your DMP provider for support.


Will creditors contact me while I’m on a DMP?

Creditors can continue to call or write to you during your DMP. In practice, you can expect contact from creditors to reduce as long as you stick to the payments.

Contact from creditors is more likely:

  • In the early stages of your DMP
  • If you miss any payments during your DMP
  • At points when creditors want to check if anything has changed (typically every six or twelve months).

Creditors have to send you some letters by law, and these will continue if you’re on a DMP. Examples include annual statements for some types of debt, or default notices

If a creditor is still contacting you a lot, or pressuring you to increase your payments or pay them extra outside the plan, then let your DMP provider know.

Can I send letters from creditors to my DMP provider?

Yes, although it will be safer to scan or take a photo of letters you receive from creditors, and send them as an email attachment. There’s a risk of letters getting lost or delayed if you send them by post. If you have to send documents by post, it’s best to make photocopies of the letters and send them by recorded delivery if possible.

Call your DMP provider if you’re worried or confused by creditor letters. They’ll explain what they mean and what you need to do next.

Can my DMP provider force creditors to stop contacting me?

Your DMP provider can’t force creditors to stop contacting you. However, they’ll usually try to convince your creditors to reduce contact.

Most creditors tend to limit contact once they know you have a debt solution in place. They may still contact you just before you’re due to review your DMP. If this happens, let them know your DMP provider will be in touch once the review is complete.

Can I complain about creditors contacting me?

If you feel stressed due to creditor contact by telephone, you can politely ask that the creditor removes your number from their records. If contact persists, you do have the right to make a complaint.

Looking for more info on credit and your DMP?

On our blog, you can find lots of information on debt, your DMP and your credit file, including:


Will a DMP affect my credit file?

DMP will impact your credit score because you may be paying less to your debts than the amount stated in the agreements you signed with your lenders. This means arrears are building up each month, and this will be recorded in the payment history shown in your credit report.

Creditors may also add a marker to your credit file showing that your payments are being made through a DMP.

It’s also likely that at least some of your accounts will default while you’re on a DMP, and this will also be recorded on your credit file.

Can you get a County Court judgment (CCJ) on a DMP?

A DMP isn’t based on Government legislation, so unlike solutions such as an individual voluntary arrangement (IVA) or bankruptcy, a DMP doesn’t protect you from legal action by your creditors. However, while it’s possible you could get a CCJ during your DMP, it’s rare so long as you stick to the payments you’ve agreed. In the vast majority of cases your creditors won’t take this type of action.

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When you start a DMP, your provider will send your creditors details of your income, household spending and debts. This shows them that the amount you’re paying is the most you can realistically afford, and that your payments are being shared out fairly among your creditors.

A court would use similar information to decide how much you should pay to a CCJ, so creditors know that court action isn’t guaranteed to get them a higher payment than they’re already getting from your DMP.

However, it’s still possible that a creditor could apply for a CCJ during your DMP. For example, they may do this because they want to apply for a charging order, to secure the debt against your property, or because the CCJ gives them an extra guarantee that you’ll stick to the agreed payments.

If you have a CCJ added to a debt during your DMP, it’ll need to be treated as a priority debt because the consequences of missing payments to it become much more serious. This means that if you ever miss a monthly DMP payment you’ll still need to make sure your CCJ is paid. Should you receive a CCJ, you will need to make your DMP provider aware so it can be dealt with properly. 

Is a DMP right for you?

If you’re struggling with unsecured debt then please get in touch. Our expert advisors can give you advice on dealing with arrears and getting your payments up to date. You can also use our free online debt advice tool.