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19th November 2012

If there is a change in your circumstances during your debt management plan you may be worried about what will happen. Many people understandably become quite stressed where they fear that they cannot keep up with the payment that they have been making into their DMP. What should you do if these types of changes in circumstances affect you?

Most debt management plans are expected to run for a period of several years so it’s inevitable that things can change during that time. The most common types of example include redundancy, splitting from a partner, poor health, loss of bonuses or overtime, or increased costs as a result of a growing family.

The most important thing to do if you are affected by this type of changed circumstances is to get in touch with your debt management plan provider as soon as you possibly can. They will have dealt with this type of situation on many occasions in the past and should be able to reassure you about the options that you will have.

Often the outcome will be a reduction in the debt management payment. You may be concerned that your creditors will not welcome this, but it is the job of your DMP provider to explain the reasons for the change to the creditors and to provide confirmation that you will still be paying back the debts as quickly as you can afford to. Creditors are generally supportive of this type of changed circumstances so long as they are kept fully informed.

If the change in your circumstances has been dramatic you may not be in a position to pay anything (or only a very small amount) into your debt management plan. If this change will be temporary it may be possible to arrange a break in the payments. If it will be permanent you may have to consider other options to manage or deal with your debts. Some examples of other options might include making token payments, a debt relief order, or possibly even bankruptcy in extreme circumstances.  

It’s extremely important to let your debt management plan provider know about changed circumstances as soon as possible. If you don’t tell them what is going on they cannot make a case for you to your creditors. Uninformed creditors that aren’t receiving payments are much more likely to initiate legal recovery action against you.

Don’t be tempted to borrow money to try to keep all of the plates spinning in the air. Being unable to repay family or friends might be embarrassing. Being unable to repay a payday or doorstep lender is likely to be extremely expensive. Borrowing to manage a debt problem is almost always the wrong thing to do when it comes to personal finances.

As soon as you become aware of a significant change in your circumstances get in touch with your debt management plan provider. There is much that they can do to assist you.

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