If you've got a debt management plan (DMP), you might find your creditors are still contacting you or asking for payment, even though you're making payments they've agreed to.
This page explains why creditors might still contact you and what you can do about it.
There are a number of reasons why creditors might still contact you if you're in a DMP:
To send you regular account statements
Under the rules in the Consumer Credit Act 1974, your creditors will normally have to keep sending you annual statements as well as arrears and default notices in a set format. This happens even when you're in a DMP. Don't worry, as it doesn't mean there is a problem with your DMP. However, if you receive other letters demanding payment or threatening court action, you'll need to contact your DMP provider for advice.
You haven't had your DMP for very long
Some creditors might chase you for payment if you haven't yet made many payments on your DMP. You should tell your creditors that you're paying into the DMP that they've agreed to and ask if they'll stop sending you reminders.
They're chasing you for debts not in your DMP
Remember that a DMP won't pay off all your debts. Your priority debts, such as mortgage arrears or court fines, can't go into a DMP. You need to make arrangements to pay these debts first and still need to deal with these creditors yourself.
The creditor has refused to deal with the DMP provider
Sometimes a creditor will refuse to deal with a DMP provider. This could be because the creditor doesn't want to accept the reduced payments or sometimes it could be because they've objected to you using a fee-charging provider, which would mean there's less money to pay the debts you have with them. If the creditor doesn't want to deal with the DMP provider, they can still take action to recover the money you owe, which might include taking you to court.
If this applies to you, ask the creditor why they're not willing to co-operate with the DMP. You can try to negotiate with them yourself to see if they'll change their minds. However, they're not legally obliged to do so, so you might need to keep dealing with this creditor separately.
The creditor has made a mistake
The creditor might simply have made a mistake or not fully updated their records. If you think this is the case, ask the creditor why they're still contacting you, remind them that they've agreed to the DMP and ask them to update their records.
The creditor is doing something they're not allowed to do
A creditor is still allowed to contact you while you're in a DMP, but they shouldn't do any of the following:
making demands for payment in a way that is deliberately meant to alarm, distress or humiliate you, your family or your household, such as turning up on your doorstep threatening to take goods if you don't pay
contacting you too often or late at night
contacting you through Facebook, Twitter or other social networking sites
pressuring you to sell property or take out more credit to pay your debt
using more than one debt collection company at the same time or not telling you when your debt has been passed to another company
producing any document which looks like it's official when it isn't, or making false claims that a document is official when it isn't
pressuring you to pay in full orto pay more money than you agreed in your DMP
making threatening gestures or statements
threatening you with court action
If you think the creditor shouldn't be contacting you
While there are many valid reasons for a creditor to contact you while you're in a DMP, if they've agreed to the DMP they should accept the fact that you're making payments through it and keep contact to a minimum.
If the creditor is contacting you more than they should, you should tellyour DMP provider. They might be able to negotiate with the creditor to stop contacting you.
If they're unable to do this, you can complain to the creditor yourself. Explain that you're in a DMP and ask them to stop contacting you. If this doesn't work you can complain to the Financial Ombudsman Service.
Next steps
Find out what to do if you're being taken to court for debt.
FAQs
When your debt management plan is being set up, your creditors will sometimes agree to freeze any interest charges. However, they don't have to agree to this and they don't have to agree to your plan at all. If they don't, they can also continue to contact you, ask for payment or even take you to court.
Can bailiffs come if you have a debt management plan? ›
In fact, being proactive and working to set up a DMP as soon as you start to struggle with your debt repayments could stop bailiffs being appointed at all, especially if both parties have agreed a repayment plan before court action is taken and a County Court Judgement (CCJ) is issued.
What happens if a debt collector does not respond to validation request? ›
Under the Fair Debt Collection Practices Act (FDCPA), a debt collector must respond to a request for a debt validation letter. If they don't, they're in violation of the act. You can report them to your state's attorney general, the FTC or the Consumer Financial Protection Bureau (CFPB).
What should you not say to a creditor? ›
Don't provide personal or sensitive financial information
Never give out or confirm personal or sensitive financial information – such as your bank account, credit card, or full Social Security number – unless you know the company or person you are talking with is a real debt collector.
Do all creditors accept DMP? ›
It's not a given. Creditors don't have to agree to the terms of a DMP, but chances are very good that they will. Remember - a DMP means you'll be paying your debt in full, which is preferable for creditors than having you file for bankruptcy or choose debt settlement.
What percentage of debt will creditors accept? ›
Typically, a creditor will agree to accept 40% to 50% of the debt you owe, although it could be as much as 80%, depending on whether you're dealing with a debt collector or the original creditor. In either case, your first lump-sum offer should be well below the 40% to 50% range to provide some room for negotiation.
Which debts can t you pay off with a debt management plan? ›
Debts you can and can't pay off with a debt management plan
Debt management plans are mainly designed for people struggling with debt from credit cards and/or personal loans. Student loans and secured debts such as mortgages and auto loans aren't eligible.
What happens if a creditor refuses payment? ›
Your creditors do not have to accept your offer of payment or freeze interest. If they continue to refuse what you are asking for, carry on making the payments you have offered anyway. Keep trying to persuade your creditors by writing to them again.
What is a drop dead letter? ›
You have the right to send what's referred to as a “drop dead letter. '' It's a cease-and-desist motion that will prevent the collector from contacting you again about the debt. Be aware that you still owe the money, and you can be sued for the debt.
How do you outsmart a debt collector? ›
You can outsmart debt collectors by following these tips:
- Keep a record of all communication with debt collectors.
- Send a Debt Validation Letter and force them to verify your debt.
- Write a cease and desist letter.
- Explain the debt is not legitimate.
- Review your credit reports.
- Explain that you cannot afford to pay.
At a minimum, it must produce: A copy of the original written agreement between the parties, such as the loan note or credit card agreement, preferably signed by you. If the account has been sold to another creditor, that creditor must prove that it has the right to sue to collect the debt.
What are the 5 things debt collectors are forbidden to do? ›
Debt collectors cannot harass or abuse you. They cannot swear, threaten to illegally harm you or your property, threaten you with illegal actions, or falsely threaten you with actions they do not intend to take. They also cannot make repeated calls over a short period to annoy or harass you.
What is the 11 word phrase to stop creditors? ›
If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
Why you should never pay a charge off? ›
A charge-off can lower your credit score by 50 to 150 points and can also look very bad on your credit report. It signals to potential lenders that you could skip out on your debt obligations for extended periods of time.
Do creditors work with debt settlement companies? ›
Dealing with these companies can be risky. Debt settlement companies, also sometimes called "debt relief" or "debt adjusting" companies, often claim they can negotiate with your creditors to reduce the amount you owe. Consider all of your options, including working with a nonprofit credit counselor and.
Does a DMP show up on a credit check? ›
Your DMP may show up on your credit reference file. Some creditors may ask for a note to be put on your file to say that you have a DMP. This would reduce your chances of getting credit if you applied for it while on your DMP, as it would show you've had trouble keeping up with repayments.
