How to spot whether your client is in a Debt Management Plan

Research by debt charity and Debt Management Plan (DMP) provider, StepChange, found that 1 in 100 adults in the UK contacted the organisation for help between January and December 2017.

And as personal debt in the UK increases to £1.5839 trillion by the end of April 2018, compared to £1.535 trillion during the same period in 2017[1], it suggests that there may be a further rise in the number of people in a DMP.

So what does this mean for you?

If you have a client looking to secure a mortgage who is or was in a DMP, it may not be as straightforward to find out. This is because DMP providers don’t always register the DMP on their clients’ credit file.

As a broker, it’s important to select the most appropriate mortgage for your client based on their financial situation. But how can you do this if your client has a DMP that’s not been registered?

Here are a few steps you could take to identify whether or not your client is in a DMP:

  • When looking at your client’s bank statements, see if there are any regular Direct Debits or standing orders to a DMP provider
  • If you spot a pattern of regular payments to a company you don’t recognise, a quick internet search could help find out whether it’s a DMP provider
  • Establish how long the plan has been in place and whether regular payments have successfully been made to the DMP company

Having a client who is or was in a DMP doesn’t necessarily mean they can’t get a mortgage. There are lenders that provide mortgages for those in this situation providing that regular payments have been met.

Check out our product range aimed for those of your clients in an active DMP.

[1] The Money Charity


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