The Institute of Financial Planning (IFP) have released the results of a...
Help! I’m on a DMP and my debt has been transferred!
Everything is going smoothly on your debt management plan (DMP).
Then, out of the blue, you get a letter from a debt collection agency informing you that they’ve legally taken over one of your debts from the original creditor.
Basically, you now owe the money to the new organisation and not the original creditor.
What do you do now? And how does this affect your DMP?
Don’t worry, it’s simple!
First off, don’t worry or panic. Over the course of your DMP your debts could be transferred a few times. It’s just part of the normal debt collection process. Creditors often use outside agencies to collect debts. Sometimes they’ll sell your debt on to another organisation. Legally the new owner of your debt has to write to you and tell you about this.
What you need to do
You should tell us as soon as your receive confirmation that a debt has been transferred or sold. As your DMP provider we need to know when a debt’s been transferred, just so we can make sure your money is going to the right place.
But even better, you can update the creditor details yourself. By using our online DMP service you can update transferred debts without having to call. It’s simple, quick and you can do it in your own time. You can read more about online DMP and how it works in this article.
What will happen with my interest and charges?
Sometimes if a debt is passed to a new owner they will freeze the interest and charges. Many clients have told us that by proving they’re paying all they can into their DMP the new owner of the debt has stopped additional fees (however this happens on a case by case basis). Either way, the best thing you can do is to keep up with your DMP payment.
Having your debts transferred shouldn’t cause you any sleepless nights; just let us know the details and get on with your life. We’ll take care of your repayments through your DMP, whoever owns the debt.