Debt Management Plans

Repay unsecure debts with one regular affordable payment.

Affordable payments

Pay what you can afford each week/month.

One payment

On the day and frequrcy that suits your income.

Interest Potentially stopped

Interest and charges usually stopped or reduced.


You may be able to vary your payments if your circumstances change.

What is a Debt Management Plan?

A Debt Management Plan (DMP) is an informal debt repayment solution for unsecured debts.

The companies and/or organisations you owe money to are your creditors. DMPs are provided by debt management companies (DMCs) who negotiate with creditors to get lower repayments and freeze any further interest. The DMP lasts as long as it takes to repay the debts – or until the debts are settled by other means.

How a Debt Management Plan Works

An assessment of your income, outgoings and your debts is made based upon standard expenditure guidelines. This is called a financial statement.

Within this, you are allowed to budget for priority debts. These debts have more serious consequences is not paid such as Council Tax arrears and mortgage repayments and any arrears.

This gives your disposable income which is the money you have left to repay your unsecured debts once you have met normal and reasonable living costs.

If you can’t afford your debts as you’re currently being asked, but your disposable income will within a reasonable time clear the debts, then a DMP may be suitable.

You situation is explained to your creditors and an offer of payment is made to each as a percentage of your disposable income depending on how much is owed to each. While any given creditor is not obligated to accept such an offer or stop interest and charges – once hardship has been demonstrated they are normally willing to do so.

Once the DMP has been setup you make regular payments into the plan (weekly /four weekly or monthly) and this is distributed to creditors, less any fees which may be charged.

Debt Management Plan Benefits

Once your DMP is up and running, you could benefit from:

Lower payments

Payments are based on what you can afford – not how much you owe.

A single payment covers all debts

You make one payment into the plan which is distributed to creditors.

Interest frozen on debts

This is requested but is down to the individual creditor whether they will do this and if so, for how long.


You may change your payments accordingly and as your ability to pay changes. You’re not tied-in and may leave the plan if able to repay your debts by other means.

Insolvency avoided

You’ve reached an agreement with your creditors without the need for a formal soltion such as and IVA or bankruptcy.

DMP Considerations

There are some downside to entering into a DMP which include:

Impact on credit rating

Being on a DMP will not appear on your credit reports. However, as you are breaking contractual payment agreements in entering a DMP, these will appears as defaults on a credit report. Like all adverse information, this will remain on your credit reoprt for 6 years durng which time you may find it harder to obtain credit.

Not all debts covered.

Not all debts can be included in a DMP, so it is your responsibility to make sure these and other important financial commitments are maintained. Debts excluded from a DMP include:

  • Child Support Agency arrears
  • Current year council tax arrears
  • Secured loans
  • Mortgage and mortgage arrears
  • Car finance when you still own the vehicle
  • Court or parking fines
  • Rent arrears
  • Gas and electric bills with a current provider
  • Student loans
  • Income tax bills.

No obligation from credtiors.

Your creditors are not obliged to accept a DMP. The arrangements are informal meaning creditors can change their mind at any time.

Longer to repay debts.

While a DMP may reduce your monthly repayments this usually means it will take longer to repay the debts.

How We Can Help
We do not offer Debt Management Plans. However we can assess your situation and advise on your suitability for this and other options.