You can go on holiday during a Debt Management Plan if you wish. Generally the only issue is how to pay for it.

In this article:

• Are you allowed to take a Holiday during your Plan?
• What is the best way to pay for it?
• Could you miss plan payments?
• Can you save towards a holiday during a Plan?

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Are you allowed to take a Holiday during a Debt Management Plan?

A Debt Management Plan is not meant to be a prison sentence. You are free to manage your own bank account and monthly living expenses. As such we consider whether you can spend some of your living expenses budget on a holiday.

What is the Best Way to Pay for a Holiday During a Debt Management Plan

Given that you will generally not have a credit card or other borrowing facilities to fall back on, the question is how is it possible to fund a holiday if you are in a DMP.

When you are agreeing your living expenses with your creditors it is unlikely that they will allow you a specific amount for saving towards a holiday. However, you should allow yourself enough money in your budget so that you can live reasonably and allow for emergencies and contingency.

Once such a budget is agreed, you remain in control of it. As such, once you have made your agreed payments to your creditors each month, you can spend or save the remaining budget as you see fit.

If a holiday is important to you, then putting a bit aside each month to cover this is perfectly acceptable.

Could you Miss Plan Payments to pay for a Holiday?

If you are paying your creditors using a debt management plan and have not been able to save for your holiday from your normal monthly expenses budget, you might be tempted to consider simply missing the payment to your creditors for a month or two. However, this strategy is not advisable.

Your creditors will normally reduce their collection activities and even stop additional interest charges once you start to make regular agreed payments into a DMP.

If you stop making these payments for any reason, your creditors are likely to claim that you have broken the terms of your agreement and will quickly start chasing you again and will often restart adding interest.

Missing a debt management payment and using the money for other things such as a holiday could therefore trigger this type of creditor reaction.

Can you Save towards a Holiday during a Debt Management Plan?

If you are in a DMP you will not have access to credit and so you will need to pay for your break by making savings from your monthly living expenditure allowance.

If your living expenses have been correctly calculated and agreed, this should be possible but remember, it will generally take a number of months to save up sufficient funds so you need to plan for this as soon as you start your Plan.

In addition, if you have been able to save a contingency fund from your living expenses, it is always prudent to keep some of this in reserve in case of emergencies down the line and not to blow it all in one go on holiday expenses.