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A good starting point for DMP questions
By Norton5
#29925
Hello. I wondered if anyone can advise me.

I am looking at starting a DMP but there is one sticky point... I have two guarantor loans with same person as a guarantor. I made the promise to them that this would never affect them and he has also recently said that he wouldn't be able to cover these as he has just taken out a loan of his own.

I want to keep the guarantor loan payments separate to the DMP payments - is this possible? and is it likely to be accepted by other payday loan creditors?
#29935
Hi there Norton5 and welcome to the forum

One of the big differences to a DMP compared to other debt solutions is that is informal and therefore flexible.

Therefore you can choose to leave out your guarantor loans but it is not usually recommended. The issue is that you will find that you struggle to keep up the payments alongside your DMP but also you will have to include your guarantor loan payments in your living expenses and your payday loan creditors will not like that you are paying other unsecured debts in full. At the end of the day they can not stop you paying them less but may refuse to freeze interest and late payments charges.

How long will it take you to repay the guarantor loans?
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By Hayden
#29967
Hi Norton5

I think what you are saying here is you have to keep paying the loans that your friend has guaranteed. That being the case then as Melissa has said you are allowed to do this and use a DMP for the other debts.

There are two ways of doing this. The first is to come clean to your other creditors and simply include the payments as party of your living expenses budget. The creditors included in your DMP cannot stop you from doing this and they cannot refuse to accept the DMP payments you make to them. However they can retaliate by making life very difficult for you for example by refusing to stop adding additional interest and charges to your accounts which could considerably extend the time it take to repay your debt.

Given this the other option is to continue paying the guarantor loans without informing your creditors. You could do this by artificially reducing the income figure you tell them about or artificially increasing your living expenditure. Granted neither of these actions is ethical. However a DMP is an informal agreement so if needs must you can do what you like particularly if you manage the DMP yourself.