Temporary repayment plan is a temporary, lowered payments to your lenders
In a nutshell If you reach a point where you can no longer repay your debts, whether owing to the total you now owe or if your situation changes, you could be able to organise a temporary repayment plan.
A repayment plan involves small payments that act as a token gesture, rather than significant repayments towards your debts. Debt advisors from well-known organisations can assist you in communicating with your creditors.
What debt problems is temporary repayment plan debt help suitable for?
This is the best debt help if you’re facing short-term circumstances that are impacting your ability to manage your debt problems, and you know that they are only temporary, this debt solution may be suitable.
Our debt expert’s opinion on the pros and cons…
Advantages of temporary repayment plan
- Whatever the amount of the payment that you make to your creditors, legally they must accept it, however they are not obliged to freeze any additional interest or charges.
Disadvantages of temporary repayment plan
- Making limited repayments to your debts may impact your credit history for a minimum of six years.
- This form of bad debt help isn’t a long-term debt solution. It merely provides temporary relief while you deal with a change in circumstances.
- You may struggle to negotiate a temporary repayment plan with your creditors, even with the help of debt experts. Your creditors may still contact you.
Worried about debts that won't go away?
FAQs – Temporary Repayment Plan
Will a Temporary Repayment Plan affect my credit file?
What should I do if my creditors refuse to accept my offer of reduced payments?
Will my creditors freeze any fees and interest?
What if I have no money to offer my creditors?
How long can I expect a Temporary Repayment Plan to last?
How much do I have to offer my creditors?
I’ve fallen behind with my household bills. What should I do?
Making lower repayments to your debts can impact your credit file, which will make it more difficult to secure future credit.
Go ahead and make your reduced payment. Your creditors must accept your payment – no matter the amount.
While your creditors may agree to freeze any interest and charges, this is by no means a legal requirement.
If you can’t make a reduced payment offer, you should seek debt advice to explore other options, such as a temporary suspension of repayments, Bankruptcy or a Debt Relief Order.
While a Temporary Repayment Plan is an informal agreement, generally they only have a duration of up to 12 months, making them suitable only if your circumstances are going to improve in the immediate future.
There’s no set amount that you need to offer, although your creditors may return with a counter offer.
It will help your chance of success if you explain in detail why you’re currently unable to make the full repayments, and how your future circumstances will change and when. You can support this with a breakdown of your current income and expenditure. Finally, don’t be tempted to agree to repayments that you can’t afford. Instead, seek debt advice from an independent debt agency.
If you’ve skipped repayments to your ‘priority’ household bills (e.g. gas, council tax, electricity and/or your rent/mortgage) you should seek debt advice as soon as possible.
These bills take priority over all others, as there can be the most serious of consequences if you don’t pay them, such as eventual imprisonment if you don’t pay your council tax or losing your home if you fall behind with your rent or mortgage.