Debt Management Plan (DMP)
A Debt Management Plan lets you pay unsecured debts back at a rate you can genuinely afford, in one single monthly payment shared between your creditors.
Overview
A Debt Management Plan (DMP) is an informal arrangement between you and the companies you owe money to. Instead of juggling multiple bills, you make one affordable monthly payment which is distributed across your creditors on your behalf.
Because it's informal, you can start, pause, adjust or exit a DMP whenever your circumstances change. It's often the right first step when your income covers essentials but not the contractual minimum payments on your debts.
A DMP doesn't write debt off — it gives you breathing room to clear it in a way that works for your budget. Not-for-profit providers offer DMPs with no set-up or ongoing fees.
Who it's suitable for
- You have unsecured debts (credit cards, loans, overdrafts, store cards)
- You can afford something each month, but not the full contractual payments
- You'd like the option to increase or reduce payments as things change
- You want a simple, flexible route without going down a formal insolvency path
Advantages
- One affordable monthly payment covering all included debts
- Reduces creditor pressure — calls and letters typically ease off
- Interest and charges are often frozen (though not guaranteed)
- Fully flexible — you can amend or end it at any time
- No fees when arranged through a not-for-profit provider
Disadvantages
- Not legally binding — creditors don't have to agree or freeze interest
- Likely to show on your credit file, affecting future borrowing
- Takes longer to clear debts compared with formal solutions
- Doesn't include priority debts like rent, council tax or utility arrears
Eligibility
General criteria — an adviser will confirm what applies to your circumstances.
- You have enough income to make a regular reduced payment
- Debts are unsecured (a DMP doesn't cover secured debts like a mortgage)
- You're a UK resident
- You're prepared to review your budget with an adviser
Example
Priya, 34 — Manchester
Priya owed £14,600 across three credit cards and a personal loan. Contractual payments totalled £520 a month, but after essentials she only had £185 to spare.
Illustrative only. Names and figures are examples, not real customers.
How it compares
A quick side-by-side of the main UK debt solutions.
| Solution | Region | Duration | Debt written off? | Credit impact | Type |
|---|---|---|---|---|---|
| Debt Management Plan | UK-wide | Flexible | No | Moderate | Informal |
| IVA | Eng, Wal, NI | 5–6 years | Yes (remainder) | 6 years | Formal |
| Debt Relief Order | Eng, Wal, NI | 12 months | Yes (after 12m) | 6 years | Formal |
| Bankruptcy | UK-wide | ~12 months | Yes | 6 years | Formal |
| Breathing Space | Eng, Wal | 60 days | No | Low | Temporary |
| Token Payments | UK-wide | Short-term | No | Moderate | Informal |
| Full & Final Settlement | UK-wide | One-off | Partial | Moderate–High | Informal |
Frequently asked questions
Not sure where to start? We'll walk you through it.
A quick, confidential chat with a friendly advisor. No pressure, no jargon — just a clear picture of the options that suit your situation.