If you are in a Debt Management Plan (DMP) the reduced payments you have agreed with your creditors are not legally binding. As such, you can increase, decrease or even miss payments at any time without notice. As such if you have not managed to put anything aside to pay for Christmas you could miss a payment to give you a little extra cash in your pocket. However before you do this you should be fully aware of the possible consequences.
What will your creditors do if you miss payments from your DMP?
If you have been making agreed payments into your Debt Management Plan for 6 or so months most of your creditors should have stopped or at least reduced their interest charges.
If you now miss payments for whatever reason your creditors will treat this as you breaking the agreement. As a result it might mean that they start to add interest on to your accounts again. More negotiating would then have to take place with your creditors before they will agree to stop interest for a second time.
BMD Tip: It is not certain that your creditors will react in this way. If you miss just one payment and then start payment as normal again there may not be any reaction from your creditors at all.
How will your DMP company react if you miss payments?
Clearly any debt management organisation that you are working with would prefer you to maintain your payments regularly each month. This is by far the easiest situation for them to manage. However if you are using a commercial debt management company and miss payments this should not cause a significant issue.
The commercial company are receiving a payment from you and so will be keen to ensure you start paying again. They should have the resources to be able to negotiate with any creditor who starts to add interest to ensure this is stopped again as soon as possible.
Some debt management charities might be reluctant to continue to run your plan for you if you miss payments. Often this is because they do not have the resources to re-negotiate your plan with your creditors a second time around.
BMD Tip: If you miss payments and the charity you are working with will not continue to management your plan, you can always start up again with a different commercial company.
Will your DMP be extended if you miss payments?
At the end of the day if you are in a debt management plan it is always in your self interest to keep up with your monthly payments. Remember you will have to repay all of the debt you owe during the plan unless you can settle early.
If you miss payments the debt still remains and still has to be paid. It simple means that it will take longer for you to become debt free.
Having said that the flexibility you get by using a DMP means that you can miss payments to fund unexpected expenses that come along. If you do so it should not cause you too much problem. However if you miss more than 1-2 you should not be surprised if your creditors do react badly and you have to negotiate them again to re-freeze interest.
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