Money Advice, Debt Advice & Debt Help
What happens to my House in a Debt Management Plan?

What happens to my House in a Debt Management Plan?

What happens to my House in a Debt Management Plan?

Your house is not directly affected by a Debt Management Plan. However as a home owner there are also some potential downsides to the solution which you should be aware of.

In this article:

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How will my house be affected by a Debt Management Plan?

Your property is not included in your Debt Management Plan (DMP) and is not directly at risk. Can creditors still apply for a Charging Order? What affect would a charging Order have on your property? To find out more please visit:

How is your Property affected by a Debt Management Plan?

Not legally binding

Not forced to include information about any equity in the property


Do you have to Release Home Equity in a Debt Management Plan?

A significant advantage of using a DMP is that you are under no obligation to release any equity from your property to help pay off your unsecured debts.

Unlike an individual voluntary arrangement (IVA) which is an alternative but more formal debt solution, your creditors will not force you to remortgage your property as part of the terms of accepting your Plan.

However it is very important to understand that this solution is not a legally binding agreement with your creditors. This means that even if you are sticking to your plan and making the agreed payments on time, your creditors still reserve the right to take legal action against you.

Is your House at risk of Charging Orders?

Once your creditors have agreed to the payments you have proposed in your DMP they will normally stop taking further collections action against you. As such as long as your payments are agreed and you maintain them regularly you should not be at risk of more legal action such as applications for a County Court Judgement (CCJ) against you or a Charging Order against your property.

However it is important to remember that your Plan is not a legally binding agreement. For this reason there is nothing to prevent any of your creditors taking further legal action against you or your property if they wish.

BMD Tip: It is not possible to guarantee the protection of your home from Charging Orders if you start a DMP. If you require this guarantee or you are worried that one or more of your creditors will apply for a Charging Order you should consider using an alternative debt solution.

Can Mortgage Arrears be included in a DMP?

You will need to make a provision in your living expenses budget for your ongoing mortgage payment and any other secured loan payments you have. The amount you pay into your Plan each month is calculated after these payments have been taken into account. As such once your plan starts you should always have sufficient cash from your income to pay your mortgage.

If you already have mortgage arrears you need to understand that these form part of your mortgage and are a secured debt. As such they cannot be directly included in your Plan. However it can still help you resolve a mortgage arrears problem.

To deal with your mortgage arrears you first need to make an affordable repayment agreement directly with your mortgage lender. The amount you agree to pay back each month over and above your mortgage payment must then be included in your living expenses budget before your DMP payment is calculated.

BMD Tip: Once your mortgage arrears are paid in full you can then use this budget to increase the amount you are paying into your DMP so that your unsecured debts are then paid off faster.

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    2 thoughts on “What happens to my House in a Debt Management Plan?

    1. Margaret says:


      If my husband adds me to the Deeds of his house, how could that affect my DMP?
      If we then take out equity release can companies make a charging order against me?

      Thank you.

      1. James Falla says:

        Hi Margaret

        As highlighted in the article above if you are a home owner your property is not directly affected if you start a Debt Management Plan. For example you are not obliged to sell the property and your creditors have no legal claim on it.

        Given this if you are currently in a Plan and are then added as a joint owner to your husband’s property on the face of it the property will not affected.

        That said you need to be careful. If you become an owner of the property you do open yourself up to the risk of any of your creditors applying for a CCJ against you and then a charging order against the property. As such becoming a property owner during a DMP could be a risky strategy.

        If you are considering raising equity from your husband’s property then it is unlikely that you will be able to become a named party on the mortgage while you are in a DMP due to your poor credit rating. As such the best course of action is probably for your husband to remortgage in his name and release sufficient funds to settle your debts.

        Once your debts are settled you can add your name to the deeds if you wish. You can also rebuild your credit rating and consider being added to the mortgage in a couple of years.

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