Debt Management Plan- FAQ’s

Why am I still receiving creditor letters?  

Once your DMP has started, you may still hear from your creditors on occasion, and we understand that this can be stressful, but rest assured, we’re always here to help. They may still contact you occasionally to provide you with statements of account or general updates- which is completely normal and nothing to worry about.  

If you receive any correspondence that is out of the ordinary- such as threats to pursue legal action against you or payment demands, don’t ignore this- please let us know immediately so we’re able to contact your creditors on your behalf. You can do this by forwarding it to us by post, emailing us on [email protected] or reporting it via the Financial Wellness Group app.   

I have received a letter from a creditor which says they’re adding interest. I thought this would be frozen? 

Unfortunately, creditors aren’t required to freeze interest and charges when a DMP is agreed upon, though we always try our best to negotiate this outcome for you. In most cases, creditors do agree to this so the letters you’re receiving may just be automated on their systems. However, we suggest forwarding them to us as soon as you receive them so we’re able to identify if this is the case.  

Will my lenders accept reduced payments? 

If you can’t afford your original payments, lenders usually understand that reducing them may be your only option, but it does mean it’ll take longer to clear the debt and it could also cost you more in the long run. Lenders often agree to freeze or reduce interest and charges so your debts aren’t growing while you pay them off, although this is not guaranteed. Whilst we’re negotiating, lenders may continue with any legal action against you, and they might carry on trying to collect their debt as normal – so they could still add interest and charges, issue a default notice or take legal action against you. However, we’ve been negotiating with lenders since 1993. We have strong relationships with major lenders across the UK – and we’ll be here to represent you when your arrangements are reviewed every year. 

I have just received an annual report. What is it? 

Your annual report is a written summary of how your DMP has gone over the last twelve months. A copy of this must be sent to you and your creditors. It includes how much you have paid into your DMP and how much your creditors have received so far. It also includes the outcome of your income and expenditure review and your income reviews. If you have been unable to make payments as expected, this must also be reported to your creditors. 

What do I need to prepare for my annual review? 

All you need to send do is complete the review questionnaire available within the Financial Wellness Group app to ensure your DMP remains suitable and sustainable. Once you’ve completed this, a member of the time will be in touch to discuss the outcome of your review. 

I have just received a quarterly statement. What is it? 

Your quarterly statement is a summary of how your DMP is progressing. We will send you an update every 3 months to let you know how much you’ve paid into your DMP, the remaining balance and the approximate time remaining on your plan. However, you can check the progress of your plan at any time via the app.  

We’ve received a letter requesting proof of income. Why? And what should I do? 

As part of your DMP, we are required to check that your plan remains suitable and sustainable. If you send us proof of income and we find that you’re earning 10% more, or less, than initially stated, we will review your plan to help you manage your payments better or pay off your debt quicker. You can do this by sending us photocopies to [email protected] or via your online account.  

I’m struggling to make payments due to a change in my circumstances, what should I do? 

We understand that circumstances can change, especially when it comes to financial security. But don’t worry, we are here to help you, whether these changes are short or long-term. If you’re struggling to make payments for the short term, we may be able to offer you a payment break if you provide us with sufficient evidence.  

Alternatively, if your circumstances have changed more substantially, we still want to help. 

• Give one of our personal finance officers a call who may be able to change your payment to suit your new budget. Similarly, if your income goes up, you may have the chance to increase your payments and complete your plan sooner.  
• It may be that your circumstances have changed to such an extent that another type of debt solution may now be better for you. 

Remember, if you experience a change in circumstances, don’t worry. We’re always here to help, no matter your situation.  

My contact details have changed – is there an email address I can send the update to? 

Within the Financial Wellness Group app, you are able to update your contact details. If you aren’t yet using the app, you can also email us your new contact details: [email protected] 

How will a DMP affect my credit rating? 

As you will be making smaller payments to your creditors through your DMP, you’ll default on your original payments which will show on your credit file for six years from the date is was registered. Therefore, your ability to obtain credit could be affected for the short, medium or long term, which could make it harder to borrow money, open a new bank account or get a mortgage. However, not getting help with your debts could have an even bigger impact on your credit rating in the long term.  

What debts are covered by my plan?  

Your plan doesn’t cover your mortgage or other secured debts. You must carry on paying for these along with your other ongoing commitments throughout your Plan. Failure to pay these “priority debts” has serious consequences including added costs, loss of service, repossession, eviction, legal action and criminal offences. Examples include your rent, Council Tax, utility bills, student loans; hire purchase agreements; Income Tax; child support/ child maintenance; and court fines. Your Plan should make these easier to manage as it’ll free up the money you need for those payments every month