- Debt Solution
Debt Management Plan (DMP)
If you’re keeping up with your non-priority debts but the number of separate payments each month has become unmanageable, a Debt Management Plan could bring everything together into one simple, affordable payment. It’s an informal arrangement rather than a legal one, which brings both flexibility and a few things worth understanding before you start.
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Please note that debt solutions may not be suitable for everyone and fees may apply Click Here. Entering into an IVA will impact your credit rating.
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- What is An DMP
What is a Debt Management Plan?
A Debt Management Plan is an informal agreement that helps you manage non-priority debts things like personal loans, credit cards, store cards, and other unsecured borrowing.
Rather than paying several creditors separately each month, a DMP rolls everything into one combined payment, sized to what you can actually afford. Depending on your circumstances, some creditors may also agree to reduce payments or freeze interest and charges, so more of what you pay goes towards clearing the debt itself.
About Debt Relief Order (DMP)
- A DMP is an informal way to manage non-priority, unsecured debt in the UK
- It combines multiple debts into a single monthly payment, based on what you can genuinely afford
- Setting one up means getting debt advice, choosing how you'll run it, and reaching agreement with your creditors
- Missing agreed payments can still damage your credit rating
- Because it's informal, creditors don't have to accept reduced payments or freeze interest some may decline.
- There's no fixed end date and no debt write-off a DMP runs until your included debts are repaid in full
- How It Works
How does the Debt relief order work?
Doing it yourself
You negotiate directly with your creditors and manage the plan on your own. This keeps you in full control and avoids provider fees, but means you're the one liaising with each creditor, negotiating reduced payments, and keeping everything on track without support.
Working with a DMP provider
A specialist provider negotiates with your creditors, builds a plan around your circumstances, and manages it on your behalf. This usually comes with a fee for their time and ongoing management, but takes the day-to-day pressure off you and gives you access to guidance throughout.
Once set up, you make one monthly payment, which is then distributed across your included creditors. There’s no fixed end date, a DMP simply continues until everything included has been paid off in full, so its length depends entirely on your monthly payment amount and total debt. Keeping payments consistent is essential. Regularly missing them can put the whole plan at risk of falling apart, so staying in open contact with your provider (or your creditors, if you’re managing it yourself) matters throughout.
- Eligibility
Who is eligible for a Debt Management Plan?
A DMP tends to suit people who:
Can realistically repay their debt in full, but need more time and a lower monthly payment to do it
Have a steady income and can commit to a consistent monthly amount that fits their budget
Are dealing mainly with non-priority, unsecured debt (see "What's Covered" below)
Want an informal solution without the legal restrictions of an IVA, DRO, or bankruptcy.
Because every situation is different, it’s worth talking it through with an adviser first. They’ll look at your income, outgoings, and goals, and help you weigh a DMP against other solutions before you commit to anything.
- What's Covered
What debts can be included in a DMP?
- Usually included
- Credit card debts
- Store cards
- Personal loans
- Payday loans
- Overdrafts
- Some utility bill arrears
- Usually excluded
- Mortgage arrears
- Rent arrears
- Council tax arrears
- Child maintenance payment
- Certain utility bills
- Income tax arrears
- Court fines
Because every situation is different, it’s worth talking it through with an adviser first. They’ll look at your income, outgoings, and goals, and help you weigh a DMP against other solutions before you commit to anything.
- Pros & Cons
Advantages and disadvantages of a DMP
- Pros
- Can lower your monthly payments to something genuinely manageable
- An informal route that avoids the process of bankruptcy or formal insolvency
- Flexible payments can be adjusted if your circumstances change
- Combines multiple debts into one simple monthly payment
- Some creditors may agree to reduce or freeze interest and charges
- Cons
- No debt is written off you'll repay the full balance, which can make the plan run longer.
- Missed or reduced payments are likely to affect your credit rating.
- Being informal, creditors aren't legally bound to accept it, and some may decline.
- No fixed end date duration depends entirely on your circumstances.
- All included creditors need to agree, and any of them can withdraw at any point
- Fees may apply if you use a DMP provider
- Cost & Fees
How much does a DMP cost?
Bankruptcy is a matter of public record, but it isn’t something that’s actively publicised or widely broadcast. That said, certain parties can access this information:
Managing it yourself
there's no fee to negotiate directly with your creditors and run the plan on your own.
Using a DMP provider
most providers charge a fee for setting up and managing your plan, usually built into your monthly payment or charged separately. This varies by provider, so always ask for a full breakdown of costs before agreeing to anything.
No fixed total cost
because a DMP has no set end date and no debt is written off, the overall amount you'll pay is simply the total of your included debts, potentially plus any provider fees, it does not include hidden charges beyond what's clearly explained upfront.
- Credit Impact
How does a DMP affect your credit score?
A DMP itself isn’t recorded on your credit file. However, because you’ll typically be paying less than the originally agreed amount to each creditor, those accounts are likely to show up as defaults on your credit report and that can affect your credit rating and make new borrowing harder to access.
This comes down to a DMP being an informal arrangement rather than a legally binding one: your creditors aren’t obliged to accept it, and can, in theory, continue to add interest or chase payment if they choose to.
- Alternatives
Is there a better option for you?
Individual Voluntary Arrangement (IVA)
For those with a regular income who want affordable, fixed repayments and to protect assets like their home
Debt Relief Order (DRO)
For those with low disposable income and minimal assets who meet strict eligibility criteria
Debt Consolidation Loan
For those who'd rather combine multiple unsecured debts into one new loan
Bankruptcy
Usually a last resort, for those who genuinely cannot repay their debts
*to understand what you could qualify for, including any fees or downsides, so you can decide what’s genuinely right for your situation.
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See If a DMP Could Work for You
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- Takes less than 2 minutes
Check if you qualify
- 60 seconds
- No credit impact
- No obligation
Please note that debt solutions may not be suitable for everyone and fees may apply Click Here. Entering into an IVA will impact your credit rating.
- Good to know
Frequently asked questions
A DMP is an informal UK debt solution that combines non-priority, unsecured debts such as credit cards, loans, and store cards into a single, more affordable monthly payment based on what you can genuinely afford.
The DMP itself isn’t listed on your credit file, but reduced payments usually cause the included accounts to show as defaults, which can affect your credit rating for around six years.
No. A DMP is an informal agreement, meaning creditors aren’t legally required to accept reduced payments or freeze interest, and can, in theory, continue to add charges or chase payment.
No. A DMP is built around repaying what you owe in full, just on more manageable terms it doesn’t include any debt write-off.
There’s no fixed term. It runs until all the included debts are fully repaid, so the length depends on your monthly payment amount and total debt.
Priority debts such as mortgage or rent arrears, council tax arrears, child maintenance, income tax arrears, and court fines generally can’t be included, as these carry more serious legal consequences if unpaid.
Both are possible. You can negotiate directly with creditors yourself at no extra cost, or use a specialist provider who manages the process for you, usually for a fee.