Last updated: 23/07/2020 | Estimated Reading Time: 2 minutes
Cancelling a debt management plan
A debt management plan is different to an individual involuntary arrangement in a few ways, the most obvious being that a debt management plan is not legally binding. This means that you are completely within your rights to cancel your plan at any point if you feel that it is no longer beneficial to your situation. However before you do this you should be aware that if you do, it is highly likely that your lenders will begin to chase you up for the outstanding debt. This could be directed at you in the form of letters or other correspondence but it could also come in the form of court action. It is also worth noting that it is unlikely that you will be able to claim a refund from your debt management plan suppliers for any services that they have already carried out.
In This Guide:
How to cancel your debt management plan
Before you can cancel your debt management plan you must get in touch with your creditors and let them know that you no longer wish to carry on with the arrangement. Once you have done this they will send you a letter of official confirmation to let you know that the plan has been cancelled. Once this has been done your creditors will then expect you to pay exactly the same repayments as you were making before you started your debt management plan.
If you used a debt management plan firm to organise the plan and to carry out your communication with your creditors, you will need to inform them of your desire to cancel and they will then pass this information on to the lenders. Once this is done you will then have to take over correspondence between the creditors and yourself.
How will you deal with your debt?
Once you have cancelled your debt management plan you must then think about exactly how you are going to manage your debt without such a plan in place. As soon as your debt management plan is finished you will be pursued by your lenders for full repayment of your loan. As a result of this it is extremely important that you figure out an alternative debt solution in order to resolve your financial difficulties as soon as possible.
There are many different debt solutions available on the market and each one may be better or worse suited to you than the others. It is for this reason that you must look over all of your options before deciding which route to go down. It may even be worth enlisting the services of a financial advisor, they will then be well placed to talk you through all of your different options and which one is most ideal for your situation.