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Living on a debt solution

Can you manage water arrears on a Debt Management Plan?

Posted 06 August 2016 by Emily Bancroft

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Find out if a DMP can help with utility arrears.

A Debt Management Plan (DMP) is one way to get back in control of your money if you’re struggling with debt problems. It allows you to combine all of your unsecured debts into one lower monthly repayment.

This means you don’t have to worry about paying off several different debts each month – you just make a single payment. You’ll only ever pay what you can afford after your essential bills and expenses, so it won’t ever be more money than you’ve got.

But what debts can you include in your DMP? Can you include water arrears and other utility bills? Let’s take a look at the rules.

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How a Debt Management Plan can help with water arrears with your current supplier

There are two ways that a DMP can help you get back on track with areas with your current supplier.

Firstly, when you enter a DMP, we’ll work out how much you need for your essential bills, including your rent, council tax, gas, electricity and water bills. You’ll only pay what’s left after these essentials towards your unsecured debts – so you should be able to pay your water bill in full when it comes in.

Secondly, when you’re working out your budget, we can also make an allowance in it to contribute towards your water arrears. This means that, as well as keeping up with your new bills as they come in, you’ll have enough money to pay off the arrears over time.

What a DMP can’t do is reduce your water bill. This is because your water and sewage is an active bill for an ongoing supply, so you need to treat it as a priority payment.

How a Debt Management Plan can help with water arrears with a previous supplier

If you’ve got previous water arrears – so if you’ve moved house and your water arrears are from a different address with a different supplier – you can include these in your DMP. And if you’ve got a CCJ for water arrears, you can include this portion in your DMP.

Why it’s important stay on top of water bills

As we all know, water is essential for life – which is why the water company can’t cut you off if you get behind. But that doesn’t mean your water supplier can’t do anything if you do miss payments. They can send you reminder notices, call you, pass the debt to a debt collection agency or even start legal action to get a CCJ against you.

If the firm does get a CCJ against you, then they can even ask your employer to deduct the money you owe from your wages. The CCJ will also show on your credit history for six years, which will make it harder and more expensive to borrow over that period.

Getting help

Water providers have a code of practice that says how they should deal with customers who are in financial difficulties. If you’re struggling to afford your water bill and you’re slipping behind, get in touch with your supplier in the first instance. They’ll be able to see how much you can afford to repay on top of your other debt repayments and if it will be enough to clear your water arrears.

If the cause of your money problems is that you have other unsecured debts to repay, and that’s the reason you are struggling with your water (and other bills) then it make sense to take expert debt advice. You can get free and impartial support from the Money Advice Service about anything to do with debt or money problems or get in touch with our debt advisors using any of the options to the left. 

They’ll be able to talk through your circumstances, look at how much you owe and how much you’re earning and see what debt solution is best for you. Don’t worry – no matter how difficult your situation seems, there’s always a way out of problem debt.

 

 

by Emily Bancroft

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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.