What to do if your situation changes during an active DMP

Since a DMP it is not a legally binding agreement like an individual voluntary arrangement (IVA), you may find that your creditors continue to charge interest or late fees on your existing debts.

This would cause your debt to continue to rise over the course of the DMP, and you could end up having to pay back more than the amount decided upon when the DMP was set up.

The only thing you can really do if this does happen to you is to contact your creditors (either directly or through your DMP provider) and to ask them to freeze any interest charges or late fees but they are under no legal obligation to acquiesce.

Otherwise, you’ll have to simply factor these extra charges into your monthly payment plan or, if this isn’t viable, cancel your DMP and choose a more severe debt solution like an IVA or bankruptcy.

Even though they aren’t legally obliged to, you may well find that your creditors will freeze any interest on the debts you owe.

Your DMP provider will be responsible for trying to convince your creditors to freeze their charges and will do so before the DMP is put into place. They’ll then let you know if their attempts have been successful and help you work out the best course of action if not.

The positive upshot of the informal nature of a DMP is that if needs be you are within your rights to change, or at least attempt to change, the terms and conditions of the plan.

So if your financial situation worsens for example, and you find yourself no longer able to afford your monthly payments, then you could petition to reduce them.

If you want to cut down your monthly payments then get in touch with your DMP provider who’ll contact your creditors and try to negotiate a more affordable plan.