Do I have to Include All Debts in a Debt Management Plan?

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

If you’re thinking about a Debt Management Plan (DMP) to handle your debts, this article is here to help.

You may be asking, ‘do I have to include all debts in a debt management plan?’ This is a common worry. In fact, over 170,000 people visit our site each month seeking advice on debt matters.

In this article, we’ll cover:

What a Debt Management Plan is and how it can help you repay your debts
If you should include all your debts in a DMP
The chance of writing off some debt
Things to avoid when dealing with a DMP
How a DMP may affect your credit score

Some of our team have been in your shoes, trying to manage debt. We know the worries and fears you might have. We’re here to answer your questions and help you make the best choices.

Should I Include All My Debts in a Debt Management Plan?

The short answer is yes, you should include all your debts in a debt management plan.

You may be wondering why it’s a good idea to include all your debts in your plan, regardless of whether they are personal loans, credit card debts, or other unsecured loans.

The reason why is because if you mention all your debts in your DMP, your creditors are far likelier to trust you and be more flexible and accommodating during the active period of the DMP.

Several debt help agencies strongly recommend that you mention all your unsecured debts in your DMP. Since the aim of getting a DMP is to be able to pay your debts off as quickly as possible, it could serve you well to include all your debts in your plan.

Some creditors constantly monitor your credit file and all your financial activity as long as you’re bound by the DMP. If they see debts listed that they were not informed about, it could signal a lack of trustworthiness to them.

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Additionally, if your creditors see you trying to hide some of your debts from them, they could interpret that as financially risky behaviour.

They could see it as you trying to hide your financial instability from them and thus may ask for additional charges and an increase to the amount of interest.

Also, make sure to list all your credit card debts in your DMP as well. If you don’t inform your creditors about all the credit cards you own and plan on using, they could potentially disqualify you from the program and you’ll end up losing the privileges of the DMP.

Additionally, some creditors may require you to not use credit cards at all as long as you’re bound by the DMP, so listing all your credit card debts and other unsecured debts will work in your favour tremendously.

Lastly, the good news is that there is no real limit on the number of debts you can include in the DMP. That’s good news, since you should be trying to let your creditor know about all the money you owe.

If your creditor sees that you’re earnestly trying to pay them back, they will be much more likely to agree to the terms and conditions of the DMP and even facilitate you when it comes to your monthly payments.

How a debt solution could help

Some debt solutions can:

Stop nasty calls from creditors
Freeze interest and charges
Reduce your monthly payments

A few debt solutions can even result in writing off some of your debt.

Here’s an example:

Situation

Monthly income	£2,504
Monthly expenses	£2,345
Total debt	£32,049

Monthly debt repayments

Before	£587
After	£158

£429 reduction in monthly payments

If you want to learn what debt solutions are available to you, click the button below to get started.

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Things to Avoid When Dealing With a DMP

This section will address certain things that you should avoid doing and choices you should avoid making when you’re dealing with a DMP.

Let’s get right into it.

Avoid making additional/extra payments to your lenders other than your basic DMP payments.

If you try to pay your creditors extra money other than that associated with your regular DMP payments, this could indicate to them that you have an additional source of money and that you have more money than they think.

Once they begin to suspect that, it could open up a new window of problems for you, such as tighter conditions by your lenders towards the loan amount, insistence that you pay them back earlier than what was previously agreed upon, or even them wanting to revoke the DMP.

Finally, if a creditor or debt collector is chasing you and trying to coerce you into paying them more than what was agreed upon in the DMP, you can choose to take legal action against them in court.

Do not lose your cool

When you’re dealing with a debt management plan DMP, it can be easy to lose your cool and suffer from stress and constant anxiety.

Even if the terms, conditions, and requirements of the DMP seem daunting and overwhelming, I assure you that you can get through the process if you listen to your DMP provider carefully and follow the guidelines they lay out for you.

Other than that, make sure you don’t delay your payments and that you stay on top of any updates and changes to your program.

» TAKE ACTION NOW: Fill out the short debt form

Don’t search on the internet and expect to find a solution tailored towards you

The best thing that can help you in your situation is advice that is tailored to your specific situation, your personal goals, and the terms and conditions of your DMP.

The best person to give you that advice is your DMP practitioner. Make sure you stay in contact with your provider and ask for answers to all the questions and uncertainties you have in mind.

If you think searching the internet for generic advice will help your case, think again. Your provider knows the details of your situation, and they are who you should be going to for advice.

Don’t sacrifice important utilities and bills for your DMP

Make sure that you’re not prioritising your DMP over important bills you need to pay and living costs that you incur.

Remember, if your DMP instalment is so big that you have to choose between important bills and necessities and your DMP, then they’ve been calculated wrong and you may need to consider getting an alteration to your plan.

If you feel like you need a different solution, don’t be afraid of letting your debt management company know about your situation.

Thousands have already tackled their debt

Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.

I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.

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Frequently Asked Questions – FAQs

What kinds of debt can’t be included in a DMP?

Secured debts, such as loans that are secured against a property of yours, can’t be included in a DMP. Also, DMPs don’t cater to certain types of unsecured debt, such as student loans.

Can I go to jail for not being able to make payments on my DMP?

No, you cannot be jailed for failing to make payments on your DMP. It will, however, have a negative impact on your credit rating and your ability to get loans in the future.

Is a DMP right for me?

If you have an unsecured loan that you know you won’t be able to pay off as a lump sum, a DMP could possibly be right for you. If your financial circumstances are such that you find it much easier to manage your debt once you’re paying it back in monthly instalments, a DMP is definitely the right choice for you.

What happens if I don’t include all my debts in my DMP?

If you don’t include all debts in your DMP and your creditors find out, they could see this as shady behaviour. Some lenders may interpret this as you trying to hide your debts from them so as to project a false sense of financial security to them and have them consider you a reliable financial stakeholder. Others may interpret it as you trying to hide your financial instability, such as you not being able to make payments on the DMP because of your other debts, from them. Either way, they won’t trust you as much and won’t be willing to cooperate as much as they would if you do mention all your debts in the DMP.

Will my creditors be more supportive of my DMP if I include all my debts?

Yes, it’s very likely that your creditors will be more supportive of your DMP if you include all your debts in the plan. The reason is because they are likely to trust you if you show them the complete list of debts you owe and the amount of money you can afford to pour into the DMP. They may even be willing to cooperate on difficult financial matters.