Debt solutions
Debt Management Plan (DMP)
An informal agreement with your creditors to repay your debts at a rate you can afford, all through one monthly payment.
- Single monthly payment based on your budget
- Flexible, with no minimum debt level
- Creditors may agree to freeze interest and charges
- Can be adjusted or ended if your circumstances change
A DMP may not be suitable in all circumstances and fees may apply. A DMP is likely to affect your credit rating.
A DMP at a glance
- One monthly payment
- Shared between your creditors
- Flexible term
- No set end date or minimum debt
- Provider deals with creditors
- One point of contact on your behalf
- Not on the insolvency register
- A DMP is an informal arrangement
Understanding DMPs
What is a DMP?
A DMP is an informal arrangement between you and your creditors to repay your unsecured debts at a reduced, affordable rate. You make one monthly payment, and this is shared out between the creditors included in your plan.
Because a DMP is not legally binding, it is flexible. You can increase your payments, settle early or end the plan at any time. The same flexibility applies to creditors though. They do not have to accept the plan, can continue adding interest and charges, and can still take further action to recover their money.
DMPs are available across the UK and there is no set end date.
No fixed end date. The plan simply lasts until the debts included in it are repaid.
The details
How a DMP works, step by step
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Free initial chat
A confidential conversation with an advisor to understand your situation. No pressure, no obligation.
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Review your options
We explain every solution you qualify for, not just a DMP, so you can make an informed choice.
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Agree your budget
We work out what you can realistically afford each month after your essential living costs are covered.
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Proposal to creditors
Your DMP provider contacts your creditors, proposes the reduced payments and asks them to freeze interest and charges. Once payments are agreed, you make one monthly payment and the provider distributes it for you.
A DMP could be an option if you:
- Have unsecured debts, such as credit cards, loans or overdrafts
- Can afford regular monthly payments, but not the amounts creditors currently ask for
- Expect your situation to improve, or want to avoid a formal insolvency solution
There is no minimum or maximum debt level. An advisor will confirm whether a DMP is the most suitable option for you.
Fees and costs
Initial advice is free. Some DMP providers charge a set-up fee and a monthly management fee, which is taken from your payments. Any fees will be explained clearly before you decide to proceed. Free debt management plans are also available from charities, which an advisor can tell you about.
A DMP may not be suitable in all circumstances and fees may apply.
Weighing it up
Is a DMP right for you?
Advantages
- One monthly payment shared between your creditors
- Flexible, with no legally fixed term
- Creditors often freeze interest and charges
- Your provider deals with creditors for you
- Not on the Individual Insolvency Register
Things to consider
- Not legally binding, so creditors can still act
- Creditors do not have to freeze interest
- Repaying at a reduced rate takes longer
- Missed payments can affect your credit rating
- No debt is written off, you repay it all
FAQs
Frequently asked questions
Will a DMP affect my credit score?
It is likely to. Paying less than your contracts require is usually recorded on your credit file, and markers can remain for six years. An advisor will explain the impact before you decide.
How long does a DMP last?
There is no fixed term. It depends on how much you owe and what you can afford each month. Paying at a reduced rate usually means repayment takes longer than originally agreed.
Which debts can be included?
Unsecured debts such as credit cards, personal loans, overdrafts, store cards and catalogue debts. Secured debts, court fines and child maintenance cannot be included.
Can creditors still contact me?
They can, because a DMP is informal. In practice, most contact goes through your DMP provider once your plan is up and running.
Can I get free debt advice elsewhere?
Yes. Free, impartial debt advice and free DMPs are available from charities and organisations listed at MoneyHelper, a service backed by government.
Have a different question? Get in touch. We are happy to help.
Take the first step today
A confidential chat with an advisor costs nothing and could show you options you did not know you had.
A DMP may not be suitable in all circumstances and fees may apply. A DMP is likely to affect your credit rating and your ability to obtain credit. Free debt advice is available at MoneyHelper.