Changing Your Debt Management Plan Provider
One of the key benefits to a debt management plan (DMP) as a debt solution is the flexibility that comes from the fact that it is not a legally binding agreement. As such it can be cancelled at any time and you are free to change to a different DMP provider if you are unsatisfied with your current one for whatever reason.
Thankfully, the switching process is a straightforward one.
We’ll go over some of the reasons for which you might want to change provider, certain things you should take note of if you do and, finally, what the switching process actually involves.
Why should I change my DMP provider?
There are a variety of reasons for which you might be unhappy with the services provided by your current debt management plan provider.
One of the most basic reasons is the cost. DMP providers will often charge for their services, though there are companies that will set up a DMP for you for free. Among those that do require payment, the actual fees can vary greatly both in terms of actual cost and in terms of how they charge.
If you’re not careful, you could find yourself paying so much for the services of a DMP provider that you are actually increasing your overall debt rather than reducing it.
If you’re unhappy with how much you’re paying, then you should research other providers and see how much better off you could be with another company.
Another reason that you might have for switching is to do with the level of financial help and advice that you’re being offered by your current provider. Some will offer you comprehensive advice and management of your plan throughout its course, while others will simply give you enough basic information to get you started and then let the DMP take its course.
Regulations from the Financial Conduct Authority (FCA) require DMP providers to give you certain information both before you set up your plan and while it is active. If you feel that you haven’t been sufficiently informed then you should contact your provider and request the relevant information.
Head over to our article on Information Your Debt Management Plan Provider Must Provide to see exactly what is required from your provider.
Finally, you might find yourself unsatisfied with the level of customer service offered by your current DMP provider.
Before you do switch, you should get in touch with your current provider and voice any complaints that you do have. FCA regulations mean that DMP providers are obliged to respond promptly and fairly to any complaints that you do have and so it is always possible that they can address any issues you have without you having to change provider.
Things to Consider When Switching
If you’ve made the decision to switch then before you do so, there are a few things you’ll need to clear up.
Your creditors will need to be informed of your decision and you will have to reach an agreement with them regarding a change in your repayment plan.
Since a DMP is not legally binding like an IVA is, you may have some negotiating on your hands when you get to this stage.
You’ll need to make sure that your current creditors are happy with your decision to switch and with the nature of any new plan that you do set up.
You’ll also need to find out if they decide to add any additional interest charges while you switch.
How to Switch
Once you’ve made the decision to switch, and have looked around at alternative providers to find out what kind of better plan you could get yourself on, it’s time to make the change.
The whole process is pretty straightforward; we’ve broken it down into four simple steps:
1.Go over your current contract
This is mainly important just so that you make sure you’re aware of any cancellation fees you may have to pay. Certain DMP providers will charge you for cancelling their plans and others won’t. There may also be various other actions you have to take in order for the cancellation to go through so go over your contract carefully to see if any of this applies to you.
2.Get hold of all of the relevant financial paperwork
This is purely a logistical point – you want to make sure that you’ve got all of the relevant information in one place to make the whole process more streamlined.
3.Officially cancel your existing plan
This step is fairly self-explanatory, but each provider will have a slightly different official cancellation process. All you need to do is get in touch with your current provider and they’ll guide you through the rest.
4.Set up your new plan
Ideally, by this point you should have a new provider in mind and so all you need to do is get in touch with them and get started with your new, improved debt management plan.
If you’re having trouble finding a new provider, then head over to our debt management plan application page and we’ll guide you through the process quickly and easily with our trusted debt management partners.