If you use a Debt Management Plan (DMP) to solve your debt problems you need to negotiate separately with each creditor to ensure that they agree with the reduced payment that you are offering.
Your creditors are not under any legal obligation to accept the payment offer that you make but if they feel it is reasonable given your financial situation then they should do so.
However there is also the possibility that one or more of your creditors will reject your proposal. We explain your options if this happens and how you can try and gain their acceptance.
How long will it take for creditors to accept your DMP?
Once you have submitted your DMP payment offer to your creditors they are unlikely respond to you immediately. It is not unusual for it to take a number of weeks for them to acknowledge your offer and accept it and should expect to continue to receive payment demands and telephone calls during this time.
BMD Tip: Even before you get a formal acceptance of your payment offer you must start to make the proposed payments. This will put you in a much better position to negotiate and will often lead to interest and charges being frozen far more quickly.
Some of your creditors may actually not accept your payment offer and freeze further interest or late payment charges until they have seen two or three regular monthly payments from you.
Ultimately if your payment proposals are based on reasonable living expenses and your creditors can see that you are making every effort to repay as much as you can they should eventually be accepted.
Do you want help to start a DMP? Give us a call on 0800 077 6180 or complete the form below to speak to one of our experts
What if one or more creditors rejects your DMP payment?
Unfortunately some creditors may refuse to accept your payment offer. If this is the case they will continue to send collection letters and add interest to your account. In this situation the most important thing is to stick to your Plan and continue to pay the amount you have proposed.
Do not be bullied into paying more than you can afford. If your payment calculations are correct and reasonable your offer will already be based on the maximum that you can pay.
As the old saying goes, you cannot get blood out of a stone. If you are pressured into paying more than you can afford by one creditor, you will no longer be able to pay what you have proposed to the others and eventually your whole plan will fall apart.
How should you manage threats of further legal action?
If you are maintaining your proposed DMP payments each month but one or more creditors continues to refuse to accept your payment proposal they may well threaten you with further legal action.
Very often given that you are making payments as per your proposal this will simply be a threat by your creditor to try and frighten you into paying more. In reality they may not actually take any further action against you because monthly payments are being made.
If a creditor does decide to take action, they will generally apply for a County Court Judgement (CCJ) against you. If this happens then you must ensure that you repeat your DMP income, expenditure and payment offer on the CCJ admission form that you receive and send this back to the relevant solicitor or creditor within the given time period.
By doing this it is extremely likely that your payment offer will be accepted. If it is still refused, you do have the option to appeal to the Court.
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