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Living on a debt solution

Can my debt management payments change?

Posted 29 May 2013 by Christine Walsh

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If your level of disposable income changes during your debt management plan, you should contact your Personal Finance Manager. They may be able to help you.

A debt management plan could reduce your problem unsecured debt repayments to a level you can actually afford each month. Your lenders might agree to freeze interest and charges on your debts too.

A debt management plan makes your monthly repayments smaller and more manageable, but your circumstances can change. Luckily, debt management plans are very flexible. If your income changes, your debt management payment payments can change or your plan could end - and we'll help you explore the alternatives.

Not sure whether debt management is right for you? Fill out our debt solution finder below:


What happens if I can't afford my debt management payments?

Your finances can go through a lot of changes during a debt management plan. Sometimes, these changes are temporary. Other times, they're more permanent.

If you experience a temporary drop in your disposable income, for example if you have to pay for car repairs, you should contact your Personal Finance Manager (the person responsible for your debt management plan) as soon as possible. Tell them about your situation, and they may be able to resolve it with you. For example, they could ask your lenders to let you make even lower payments - or even suspend your payments - until your finances are back on track. This is called a payment holiday.

If you take a temporary payment holiday, your plan will be extended to accommodate this.

If your change in circumstances is more permanent, for example if you lose your job, your Personal Finance Manager will talk you through your options. If it looks like you'd no longer be able to repay what you owe in full, they may recommend a different debt solution if it looks like the right option for you.


What happens if I can afford to pay more?

During your debt management plan, you'll be expected to pay as much as you can realistically afford towards your debts after all your other essential monthly commitments (your mortgage, for example) have been paid for.

Therefore if you find you can afford to pay more towards your debts, you will be expected to increase your monthly payments into your plan. This payment will still be affordable - but it means that you'll be able to repay what you owe more quickly.

If your disposable income increases significantly, you might be able to resume the payments you were struggling with before you got onto a debt management plan in the first place, which means your debt management plan can come to an end.

And if you receive a lump sum, like an inheritance or a lottery win, you could use this to repay your debts in full.

by Christine Walsh

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.