A debt management plan (DMP) is an informal arrangement between you and your creditors. We manage these plans free of charge so that everything you pay into the plan goes towards clearing your debts.
Our debt advisors are always just a phone call away to answer any question, but here are the 8 questions we get asked the most, with answers, to save you a call if possible!
1. Are creditors still adding interest and charges?
The best way to find out if creditors are still adding interest and charges is to check your monthly statements from your creditors.
2. Have creditors accepted my offer?
Creditors will sometimes write to StepChange Debt Charity to say that your offer of payment has been accepted, sometimes they will write directly to you, and sometimes creditors don’t make any contact (it can be confusing!). If interest and charges have been suspended it looks like creditors are happy with the revised amounts being paid.
3. Creditors have rejected my offer; what do I do?
As above, you might get a letter from a creditor saying they have rejected your offer of payment. In reality this makes no difference to your DMP. You continue to pay us and we will distribute the same amount to the creditor whether they reject the arrangement or not.
4. Why am I still being charged interest?
Contractually a creditor can continue to add interest and charges if they wish. Once you break the original terms of your contract creditors can enforce penalties, as detailed within the original terms of the credit agreement you signed or agreed to.
5. Can StepChange Debt Charity stop interest and charges?
Creditors understand that by using StepChange Debt Charity you’re not paying a fee and therefore reducing your debt with them quicker.
StepChange Debt Charity does have a team that works on creditor relationships. We constantly strive to make our service the best for you and your creditors.
However, despite this there is nothing we, another charity or a debt management company can do to guarantee that interest and charges will stop.
6. My payment is going down; will creditors be angry?
If, at your annual review, your payment into the DMP decreases, you might worry that creditors who had previously accepted your DMP may change their minds.
Creditors can change their minds and add interest and charges if they wish but if your budget shows that you’re making your best effort along with evidence supporting the payment reduction they’re unlikely to do so. At the end of the day you can only pay what you can reasonably afford.
7. How have StepChange Debt Charity worked out my monthly income?
We work income out monthly. If you get paid weekly this will be your wage per week x 52 and then divided by 12, to equal your monthly income.
If you get paid 4-weekly you get 13 pay cheques per year, so we work this out as your monthly pay x 13 divided by 12 to equal a monthly income.
If you get paid every 2 weeks we work this out as your fortnightly wage x 26 wages per year, divided by 12 months.
This ensures that your income and expenditure are worked out using the same timescale.
8. Why haven’t StepChange Debt Charity paid my creditors?
You pay us on the 1st or 10th of the month, and we distribute money to all creditors within 5 working days of receiving it. We pay most creditors by electronic transfer so the payment will normally be applied to your account with them the same day.
Some creditors ask us to pay them by cheque, and because they have to processes these manually the payment won’t be applied to your account until a few days after we’ve sent it.
If you’re a StepChange Debt Charity client and have a question for us, contact our Customer Services team. Log in to your OnlineDMP account for more details.
If you’re a DMP client with another organisation and want to come to StepChange Debt Charity read our article on switching your DMP.