DMP (Stepchange) and redundancy

Ktaylor86

Hi All, 

Slightly speculative and hopefully not needed. 
My employer has issued noticed that redundancies are coming. I should know before the end of this week if I am at risk. 

In the meantime the waiting is difficult and I have many questions about what will happen as I am the main earner. 

Currently have a DMP with Stepchange since January 2023. Paying £341 a month currently and still owe £27,600 to 10 creditors. (This was originally £39,470 so coming down!). 

My main question is, if I am made redundant will I be able to pause the DMP? Or make token payments while I am looking for new employment? 

All my debts have defaulted already. 

Many Thanks 

Grumpelstiltskin

Yes  if you can't afford to pay your DMP then tell Stepchange you will be pausing it.

Nothing terrible will happen if you don't pay and it will give you chance to sort something out.

fatbelly

Another strategy would be to stop the payments now, and use redundancy money to negotiate full & final settlement deals.

Ktaylor86

fatbelly said:

Another strategy would be to stop the payments now, and use redundancy money to negotiate full & final settlement deals.

Thank you, something to consider when I know more. If redundancy goes ahead, after 10 years service I would get circa £9,000 in redundancy so likely not enough to negotiate F&F settlements as I owe £27K. 

But I think it will be something to consider. I will likely try and stop paying the DMP as soon as I am told I am being made redundant (in the notice period), so I can save as much as I can to live on while I look for employment. 

ManyWays

The top priority for the redundancy money is to use it to live on: pay the bills and essential costs, which do NOT include paying StepChange.

If you get another job quickly, you may well be able to use some of the money to settle some of the DMP debts, but its way too premature to be thinking about that now.

StepChange_Aidan

If you have any changes to your situation while on a DMP, you can get in touch with our Review team, who’ll be able to help. We can pause or reduce your monthly payments and discuss other options with you.

Your priority bills and essential costs are more important than debt repayments, so please don’t feel pressured into paying anything that you can’t afford to the DMP.

Our contact details can be found here.

I hope your job won’t be at risk, but just in case you need it, there’s a guide to Redundancy during a DMP here.