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Covid Payment Plan (CVPP)

The simple way to restore certainty and get your finances back on track after coronavirus.

Read on to find out more and check if you're eligible.

What is a CVPP?

The Covid Payment Plan (CVPP) is a short-term helping hand, offering you a simple alternative to full debt advice, long-term restructuring of debt or taking additional borrowing to repay arrears.

Here, we explain everything you need to know about the CVPP, including:

  1. What does a CVPP do?
  2. How does it work?
  3. Is a CVPP right for me?
  4. Benefits of a CVPP
  5. Things to consider before applying
  6. Other available options
  7. How to apply for a CVPP
  8. CVPP FAQs
  9. Please make sure you read this information carefully before you decide to go ahead with a CVPP as other options may be available to you.


    What does a CVPP do?

    It gives you time to recover your income and regain control of your financial situation. A simple way to pay back money you owe towards your credit commitments based on what you can afford.


    How does the Covid Payment Plan work?

    If you’re on a CVPP you'll make reduced payments towards your monthly financial commitments such as your credit cards or loans.

    The reduced payments will last for the period that you are managing on a reduced income, up to a maximum of 12 months. During this time, to help your plan be the most effective it can be, it's important that you don't increase your borrowing.

    A CVPP is designed to help you get back on track until your income returns to normal and gives you certainty of what you'll be paying in the meantime. However, you'll still have debts remaining at the end of the plan. You'll need to speak to your creditors at that point to agree your new payments.

Have you applied for a payment deferral?

If your finances have been impacted by coronavirus, you have until 31 January 2021 to ask your creditor for a six-month payment deferral (also known as a payment holiday). This won't affect your credit file, so we recommend you explore this option before applying for a CVPP. Find out more about payment deferrals.


Is a CVPP right for me?

To be eligible for a CVPP, you must meet all of the following criteria:

  1. You live in the UK
  2. Your household income has been reduced as a result of the coronavirus crisis
  3. You believe there is a reasonable chance that your income will recover within the next 12 months
  4. You believe you will be able to repay all missed priority payments within 12 months or have already made an arrangements to do so
  5. You believe you’ll be able to pay a reasonable amount of what would be your normal monthly payments to your unsecured creditors every month throughout the duration of the plan
  6. You have not had a failed debt solution in the last 12 months

A Covid Payment Plan isn’t suitable if you currently have a County Court judgment (CCJ) or decree. If you have either we recommend you get debt advice from us instead.

Please be aware that a CVPP may affect your credit rating. For more information on this, please click here.

If you're worried about your finances but don't meet all of the eligibility criteria, or don't feel that a CVPP is right for you, there are other ways we can help. Check out the other options that might be more suitable.


Benefits of a Covid Payment Plan

We’ll contact the organisations you owe money to that you include on your plan and you’ll just make one single payment to us. We’ll then distribute that to manage your payments. It’s that simple and you don’t have to worry.

You just need to let us know your income and outgoings, so in return we can understand how much you can reasonably afford to repay on your plan. We’ll make sure that your budget supports you resuming payment of your mortgage or rent and any other priority arrears you may have.

If your income increases you have an option to increase your payments or settle in full and close your CVPP.

Whilst you’re on a CVPP, we’ll work with creditors to reduce or stop your interest and charges. Where this is possible, it will mean your payments will go towards reducing the money you owe. Most creditors will agree to work with us on this, but they don’t have to.

You can be confident that the support you’re receiving is from an organisation who truly understand your situation and have decades of experience in supporting people to become debt-free.

We’re a charity too, so we’re interested in supporting you, not in making a profit from your situation. We’re also committed to delivering excellent service, having been awarded the Feefo ‘Platinum trusted service’ award in 2020.


Things to consider before applying for a CVPP

Click here for a full list of debts that can be included in a CVPP.

It’s important that you continue to maintain all payments to any:


- Commitments you’ve not told us about

- Essential household bills, such as your mortgage or rent and utility bills

- Child support you pay

- Court fines you have outstanding

- Taxes you must pay

Not maintaining these payments could result in action against you.

Your creditors could try to recover the debt, you may lose access to essential goods or services or the goods could be repossessed.

You may be evicted if you don’t keep up to date with your mortgage, secured loan or rent payments.

If you have an overdraft on your existing bank account, you should aim to reduce the balance on this during the course of your CVPP. While there’s no ability to add an overdraft to a CVPP, reducing an overdraft reduces any interest and charges you have to pay for it, to positively help your financial situation.

To help you get back on track sooner, it’s important that you don’t increase your borrowing while you’re on the plan, by taking out new credit products or spending more on your current credit commitments.

If your income shows a lasting improvement during the term of a CVPP, you can increase the amount you pay, which will help you to return to making your normal monthly payments sooner. Contact us to arrange this when your financial situation improves.

You should end your plan sooner if you’re able to make your normal monthly payments to your creditors, or when you decide you no longer need it. This may help reduce the impact on your credit file.

You won’t be able to make additional, one-off payments to the plan.

If your financial situation gets more difficult and you find you’re struggling to make your monthly payment, get free debt advice as soon as possible. We’ll work with you to find your best long-term solution.

It isn’t permitted to miss or reduce your monthly payment to the plan. If you’re unable to make a payment towards your plan you must get in touch with us, as your plan will close. We’ll review your situation with you, find a solution you can afford, and cancel the plan.

The amount you owe your creditors at the end of the plan may have increased from what you owe them now.

Your creditors will expect you to repay any outstanding arrears on the money you owe after the end of your plan. You’ll need to talk with your creditors towards the end of your plan to arrange how you’ll repay the arrears. This may be done by increasing your monthly payment to them, or increasing the term of your arrangement.

Your creditors may continue to charge interest on the money you owe while the plan is in place. To reduce the amount of interest you may have to pay, we recommend you pay as much as you can afford through your plan.

If any of your creditors don’t freeze interest or charges on your account while you’re on a CVPP, your payments may only cover some or all of the interest, rather than reducing the amount you borrowed. That will mean your debt may be increasing. If this happens on any of the accounts listed in your CVPP, you should contact your creditor to understand how the payments you’re making to us are affecting your account with them. When you have this information, you may need to consider whether a CVPP is still the right option for you.

Credit providers have different approaches to how and when they issue default notices and how they’ll view the impact of this on your credit score. This means that depending upon the contributions you make to your creditors, they may still choose to record this as a default and could take further action. This may include legal action, selling the debt and/ or stopping further credit from that source. It may also impact your ability to obtain credit elsewhere. To understand what your creditors may or may not do you should contact them directly.

You should not ignore communications from your creditors during the length of your plan.

While you’re on a CVPP your credit file will reflect this and show that you’re making reduced payments by adding a notification on your file.

Creditors may add the under arrangement ‘flag’ to their account entries. This reassures anyone looking at your report that you’re making reduced payments as part of a plan.

It does mean that your credit rating will deteriorate during the time you’re on a CVPP. As you’re making reduced payments, your score will not deteriorate as quickly as it would have if you had failed to make these payments.

Of course, because the credit rating will be affected, the more you pay now and the sooner you can return to making your full contractual payments, the lesser the impact will be.

Credit providers have an individual approach to their default policies and how they’ll view the impact of this on your credit score. This means that your ability to take out new credit may be affected.

At the end of your CVPP, you may wish to take steps to improve your credit rating. We’ll provide you with helpful tips on to do this towards the end of your plan.

If you complete the plan successfully, you’ll return to making normal monthly payments to all your credit commitments, and pay your creditors directly.

You’ll find that some of your payments may have risen because of interest, charges and arrears that may have been added to your account, as you'll still have debts remaining at the end of the plan.

You’ll need to contact your creditors towards the end of your plan to come to an arrangement to repay any interest, charges and arrears. Your lenders will discuss this with you and may include increasing your monthly payment or increasing the term of your arrangement.


Do I have any other options?

A CVPP is just one of the options available to you if you've got money worries.

1. Speak to your creditors

Whether CVPP is suitable for your situation or not, we recommend you contact your creditors directly as soon as possible if you're worried about your finances.

Keep your creditors up to date with any changes in your circumstances so they can help you and discuss any options they can offer.

2. Reduce your spending

Facing living on a reduced income can be hard. To make it a little easier, it’s important to adapt your lifestyle to your new financial situation.

This will help you to make sure you’re not spending more than you can afford. It'll also help to stop your financial situation from getting worse.

Here are some ideas on ways you could reduce your spending.

3. Find out about other debt solutions

If you're not sure your finances will improve enough to return to making your normal monthly payments in the next year, you should consider other ways to deal with your debts.

You can find out what other options are available to you by taking two minutes to answer a few quick questions. We'll recommend the best solution for your situation.

4. Consider releasing equity from your home

If you're a homeowner, you could consider refinancing to release some equity from your property.

It's important to get advice and make sure you fully understand whether this is the right option for your situation. We can help and support you through this with our mortgage and equity release guidance.

How to apply for a Covid Payment Plan

  1. Read the information above and consider all of your options
  2. See whether a CVPP is right for you. To do this use our free online eligibility tool
  3. If you’re eligible, we’ll send you an email shortly afterwards containing a link to the application tool
  4. You’ll then give us details about your financial situation, and if you’re suitable you can sign up straight away

Check your eligibility

Frequently asked questions about CVPP

Credit commitments

To be eligible for a CVPP, you must be able to pay a reasonable amount of what would be your normal contractual payments. Credit commitments include:


- Credit cards

- Personal loans

- Store cards

- Pay day loans

- Catalogue accounts


Priority arrears

Some debts are a priority because the consequences of not paying them are greater than the consequences of not paying others.

For example, if you don’t pay your rent or your mortgage you could lose your home. You must always pay these before your other debts.

Priority arrears must be paid in full within the 12 months of your CVPP. These include:


- Council tax

- Water

- Gas

- Electricity

- Rates

- Other priority arrears not connected to housing or assets


The following debts can't be included in a CVPP:


- Mortgages and mortgage arrears

- Rent and rent arrears

- Secured loans

- Overdrafts

- Hire purchases and hire purchase arrears

- Benefit overpayment repayments

- Fines

- Taxes

- CCJs / decrees

- Child maintenance arrears

- Insurance arrears

- TV licence arrears

There are other options available to you if you have debts that can't be included in a CVPP.

If you're struggling to make payments towards these debts, you should speak to your creditor as soon as possible.

You can also use our online debt advice tool to find the right solution for your situation.

While you’re on a CVPP, your credit file will reflect this and show that you’re making reduced payments by adding a notification on your file.

Creditors may add the under arrangement ‘flag’ to your account entries. This reassures anyone looking at your report that you’re making reduced payments as part of a plan.

Your credit rating will deteriorate during the time you’re on a CVPP. As you’re making reduced payments, your score will not deteriorate as quickly as it would have if you had failed to make these payments.

Of course, because the credit rating will be affected, the more you pay now and the sooner you can return to making your full contractual payments, the lesser the impact will be.

Credit providers have an individual approach to how they will view the impact of this on your credit score, but your ability to take out new credit may be affected.

At the end of your CVPP, you may wish to take steps to improve your credit rating. We’ll provide you with helpful tips on how to improve your rating towards the end of your plan.

Throughout the duration of the plan, you’ll need to pay a reasonable amount of what would be your normal monthly payments. We'd recommend you pay as much as you can afford through a plan.

If you currently have a County Court judgment (CCJ) or a decree then a CVPP isn’t suitable for your financial situation. To help you find a more long-term solution to your money worries, we recommend you get debt advice from us instead.

If you're worried about your finances but don't meet all of the eligibility criteria, please complete an online debt advice session to find the right solution for your situation.

Does a CVPP seem right for you?

If you've read the information above and think a CVPP could be right for your situation, find out how to apply.

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