Skip to main content

Debt Management Plan

Debt Management Plan (DMP)

A DMP is an informal arrangement between you and your creditors, where you make an affordable monthly payment to repay your unsecured debts such as credit cards, store cards, loans and overdrafts. The amount you may pay back each month will be considered carefully, taking into account your existing household bills so that the payment is within your current means. Payments are calculated on what you can afford and not on what you owe. The amount will also be reviewed regularly to make sure you can still afford your repayments.

A DMP is designed to help anyone who may be struggling to repay their lenders. Any debts which are managed through a DMP will ultimately be paid off in full providing payments are maintained until the end.

There are some debts which are excluded from a DMP. These include rent, mortgage, fines, tax, student loans, current council tax, selected benefits, gas and electric utilities arrears and child support.

Benefits of a DMP

  • Your monthly household budget will be taken into consideration, so you only pay to your creditors what you can afford to pay.
  • If your circumstances change, the DMP can be amended to ensure you are only making payments which are affordable for you.
  • In many cases, you will no longer be contacted by creditors or debt collectors.
  • Interest & charges are generally frozen.
  • You can cancel a DMP at anytime if you need to.
  • You still apply for a more permanent solution such as an IVA, Bankruptcy or DRO.


  • Reduced payments may lead to a longer arrangement term and could have a negative impact on your credit file.
  • Some of your creditors may still make attempts to correspond with you.
  • Your creditors are not obligated to deduct or altogether halt your interest and additional charges.
  • If creditors continue adding interest and charges, this could increase the total amount you currently owe.
  • Your creditors don’t have to agree to your reduced payments.
  • Your creditors may still take further court action against you, such as a County Court judgment (CCJ).
  • Our expert team are on hand to explain the best option available for your current level of debt and circumstances. To understand your options, please request a call-back here. To see more information on the Debt Solutions, visit our main debt solutions page here.

Things to consider

Residence: You must be a UK resident and meet basic eligibility criteria.

Timescale: There are no set timescales with a DMP and because you’ll be paying less each month, it may take longer to clear your debts in full.

Priority bills: You must continue to pay any rent, mortgage, council tax, certain hire purchase agreements and utility bills such as gas, electricity and water. Failure to pay these types of debt could have serious consequences.

Joint debts: If you have a debt in joint names with someone else, this can be included in your DMP. However, your creditors may still chase the other person for all of the debt.

There are both free and fee paying debt management plans.

Frequently asked questions

Is a DMP suitable for me?

A DMP may be a suitable debt solution if you have some surplus money available each month once you’ve paid your priority costs such as rent or mortgage, food, accommodation and utility bills.

What debts can be included on a DMP?

  • Overdrafts
  • Personal Loans
  • Money You Borrowed from Friends and Family
  • Bank or Building Society Loans
  • Credit Card, Store Card and Payday Loans
  • Catalog, Home Credit or Store Credit Debts

How long does a DMP last?

The duration of your DMP depends on:

  • How much debt you owe
  • How much you can afford to pay to your debts each month

The more debt you have, and the less you can afford to pay each month, the longer the term of your DMP. However, DMPs are flexible. Should you have an increase in income, or a reduction in spending, you may be able to increase your monthly payment, which would usually reduce the length of your DMP.

How is a monthly DMP payment worked out?

Only by taking a look at your budget can a DMP provider work out how much you can pay towards your debts each month. Your priority household bills and living expenses are most important, and it’s the money left over after paying these costs that goes into your monthly DMP payment.

Debt advice charities don’t charge a fee for setting up and overseeing your DMP. However, there are some fee-charging companies that will add a fee to your monthly payment.

The monthly DMP payment must leave you with enough money to cover your living costs and a reasonable quality of life for you and your family.

Is a DMP legally binding?

No. You can stop your DMP at any time, and you don’t have to make a legal commitment when starting a DMP.

You usually need to sign a DMP agreement form. This gives the DMP provider permission to contact your creditors on your behalf. However, the agreement’s not legally binding.

Can my creditors keep charging fees or adding interest during a DMP?

DMP providers cannot guarantee that creditors will freeze interest and charges during your DMP. In practice however, most creditors understand that when you’re in financial difficulties, adding further interest or charges will only make things worse.

If your circumstances don’t improve, it’s likely your creditors will end the original credit agreement, and at that point, will consider stopping further interest and charges.

I’m not in debt. I just want to make one payment to my debts each month.

If you’re not in ‘unmanageable’ debt at the moment, but have several monthly debt payments you’re struggling with, you can still look into whether a DMP is a good idea for you.

If you’re comfortably managing your payments, a DMP may not be the best course of action for you.

Why do I need to review my DMP payment every year?

The Financial Conduct Authority (FCA) has ruled that all DMP providers must conduct a plan review with their clients at least once a year. This is to make sure a DMP is still the best option for you, and the payment you’re making each month is still a realistic reflection of what you can afford.

Can my DMP financially affect my partner or other people living with me?

Your DMP won’t affect the people you live with unless you have joint financial products or joint debts with them. This could be something like a loan, a bank account or household bills that are in both names.

We can help you with a variety of debt

Contact Us