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
If the creditor is contacting you more than they should, you should tell your 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.
How likely are creditors to accept a DMP? ›
Can creditors refuse a DMP? Yes – creditors are under no obligation to accept your DMP. They might do this if they don't want to accept reduced payments or feel you could afford to pay more. If they refuse to negotiate with your DMP provider, it can be worth negotiating with them yourself.
Should I answer creditors calls? ›
Ignoring debt collection calls may make things easier for a while, but it won't make the problem disappear. Your debt situation could snowball and potentially turn into a bigger issue down the road. Your credit score could take a hit if you repeatedly ignore calls from debt collection agencies.
What should you not say to a creditor? ›
Don't give a collector any personal financial information. Don't make a "good faith" payment, promise to pay, or admit the debt is valid.
Can I stop debt collectors from contacting me? ›
You have the right to tell a debt collector to stop contacting you. If you ask a debt collector to stop all contact – regardless of the communications channel – the collector must stop. Keep in mind, though, that you could still owe the debt.
What happens if a creditor refuses DMP? ›
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.
What is the maximum debt for DMP? ›
There isn't a fixed maximum debt level for a DMP. What's more important is whether the plan can help the debtor manage and clear their debts in a reasonable amount of time. If someone has a very high level of debt, there is a chance that either the monthly payments or the duration of the DMP would be unrealistic.
What happens if you never answer a debt collector? ›
If you receive a notice from a debt collector, it's important to respond as soon as possible—even if you do not owe the debt—because otherwise the collector may continue trying to collect the debt, report negative information to credit reporting companies, and even sue you.
Can I ignore DCM services? ›
What Happens if I Ignore DCM Services? If you are related to the person who died but are not the spouse, personal representative of the estate, or joint account holder, you can safely ignore DCM Services. An even better solution would be to request in writing that they stop contacting you.
What is the 11 word phrase to stop debt collectors? ›
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.
By paying the collection agency directly, the notification of the debt could stay on your credit report longer than if you attempt to use another option, like filing for bankruptcy. When institutions check your credit report and see this information on it, it may harm your ability to obtain loans.
Why should you 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.
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.
Even if you owe money, debt collectors aren't allowed to threaten, harass, or publicly shame you. You have the right to order a debt collector to stop contacting you, and they must comply. If there's a mistake, and you really don't owe the debt, you can take steps to remedy the error.
What is the 7 in 7 rule? ›
The 7-in-7 rule explained
Collectors are permitted to place a call to the consumer about a particular debt seven (7) times within a period of seven (7) consecutive days, so long as no contact is made with the consumer in any of the attempts.
How long before a debt becomes uncollectible? ›
Statute of limitations on debt for all states
| State | Written | Oral |
|---|
| Alaska | 6 years | 6 |
| Arizona | 5 years | 3 |
| Arkansas | 6 years | 3 |
| California | 4 years | 2 |
46 more rowsJul 19, 2023
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.
Can you still get credit with a DMP? ›
Even if you're in a DMP, your creditors may still record that you've missed payments, as you'll be paying less than you agreed to when you took out the original credit agreement. This will mean you could find it harder to get credit while you're making reduced payments and for some time afterwards.
Do creditors freeze interest on a DMP? ›
Can you get the creditors to freeze the interest? Your DMP provider will normally try to negotiate with your creditors to freeze any interest and other charges when they set up your DMP. They should tell you which creditors have agreed to this and which have not before you start your DMP.
Can debt consolidation be declined? ›
An inadequate income is one of the most common reasons you could be denied a debt consolidation loan. Lenders will compare your monthly earnings to your day-to-day expenses and debt payments. In doing so, they can determine how easily your can cover your financial commitments at your income level.
