We consider whether cash borrowed from payday loans companies and door step lenders can be included in a debt management plan. A debt management plan is designed to reduce the payments to all of your unsecured creditors so that they fit within a payment budget that you can afford. You should include all of your unsecured debts in a DMP. Cash loans that you have borrowed from doorstep lenders such as Provident or payday loans companies such as quick quid and wonga.com should always be included. Other than the fact that these debts are generally for relatively small cash loans and paid back on a weekly basis, there is no difference between them and a credit card balance or catalogue account. Payday loans are simply unsecured debts and should be treated as such when using a DMP.

Cancelling payday loan payments

One of the issues with a payday loan company or door step lender debt is that they are not normally repaid in the same way as catalogue or bank debts. Payments towards a doorstep loan will generally be collected by a company representative in person. In order to stop making these payments, you will need to tell the representative that you are no longer in a position to pay and that you are implementing a debt management plan. This is not a nice thing to have to do but the agent you deal with will generally be understanding and tell you that they will inform the head office and leave you to deal direct with the company. Payments to a payday loan are often taken directly from a debit card. The only way to stop your bank making these payments is to cancel the card. If your bank is reluctant to cancel and re-issue your card for any reason, one way of ensuring that this happens is to report your card as lost. The old card will then be cancelled preventing any further payment from the card. » Read more: Can I Include a Payday Loan in a Debt Management Plan?