If the bank that you maintain your current account with is a creditor you will need to open another ‘basic’ account with an unrelated bank. You should set about this without delay and transfer all of your direct debits to the new account together with your wages or salary if this is paid directly into your bank account. If you have an overdraft or loan with your present bank it is likely that your account will be frozen when they become aware of your financial position.
Unsecured creditors’ would consist of credit card debt, personal loans, bank or other guarantee, loans from friends or family or any other loan where a charge on property or other security has not been provided.
No. HMR&C and normal business trade creditors’ are unlikely to accept a DMP and will continue to take recovery action through the normal channels (ie court, bailiff etc.).
We will negotiate with your creditors’ lower monthly affordable payments. The downside of this is that your debt will ultimately take longer to repay.
We will be in daily contact and have built up excellent working relationships with your creditors’.
Although your creditors’ are not obliged to freeze interest or accept reduced payment arrangements, most creditors’ welcome a reasonable payment plan.
Your monthly mortgage payment is taken into account when we work out how much you can afford to pay. So you should be able to pay your monthly mortgage payments and providing there are no arrears you home should not be at risk.
If you have defaulted on your obligations to unsecured creditors’ it is likely that your credit rating has already been affected. Once you default on the original terms of your credit agreement(s) your lenders will register a notice of default on your credit record. This will remain on your file for 6 years.
A DMP is not meant to last indefinitely and is not a solution in itself. Once your circumstances change and you are in a position to meet your full obligations to your creditors’ you will no longer need the DMP. Ideally this should mean a few months but often DMPs can last for several years. Ultimately, if your circumstances do not change you may need to consider an alternative solution.