Skip to main content

Debt Management Plan (DMP)

You may be able to Stop Paying Creditors Today

Use our Bankruptcy Eligibility Checker to see if declaring yourself bankrupt could be the right option for you and what alternatives to bankruptcy may be available.

Find An Alternative To Bankruptcy – Start Your Analysis

Debt Management Plan (DMP)

Debt management plans are administered by a debt management company (DMC) who negotiates with your creditors and manages your payments to them. This arrangement is called a debt management plan (DMP).

Informal Agreement means not subject to any legally binding contract or legislation.

How Debt Management Works

You tell the DMC about your financial situation; about your household income, outgoings, other financial commitments, assets and debts. This is to determine your disposable income.

Disposable income is how much you can afford to pay your unsecured creditors once you’ve met your living expenses and essential financial commitments.

A Debt Management Plan may be suitable if:

  • You’re struggling to repay afford your debts as you’re being asked and/or you’re making just minimum payments, but;
  • You can repay them in full over a reasonable time (not more than 8-10 years).
  • You have at least 2 different creditors and you owe more than about £2000.

The DMC explains your situation to your creditors; asks your creditors to freeze interest and charges and accept reduced payments based on your disposable income. How much each creditor receives depends on how much you owe to them – your payment is split on a pro-rata basis dependent upon debt level.

Any creditor can choose not to accept any offer – they are under no obligation to do so. Such creditors can be paid anyway via the DMP; they can’t refuse payments. However they can add charges and take legal action to recover the debt; or you can make arrangements to pay them in full outside of the plan.

Most major creditors will stop interest and charges once hardship and willingness to commit to reasonable payments is established.

Debt Management Fees

A DMC may or may not charge fees; which would be taken from payments before they are shared between creditors. Typically there is a setup fee and an on-going management fee.

Duration of a Debt Management Plan

The DMP lasts for however long it takes to repay all debts in full. This depends on payments made into the plan; how much is taken by the DMC in fee and the extent that the creditor suppresses the interest and charges.

Debt Management Benefits


You pay your debts at a rate you can afford which is fair to all parties.


You can increase and possibly lower payments as ability to pay changes; you are not tied into a contract.

A single regular payment

You make a single regular payment to the DMC, which distributes payments to all creditors.

Negotiations on your behalf

Creditors prefer to deal with reputable DMCs over individuals so there is a great chance of success.

Debt Management Considerations

Negative impact on credit rating

You’ll not be making payments as per original credit agreements and this will be reported to the credit reference agencies.

Implication of DMP failing

Your situation may change and you may not be able to agree to lower payments. Creditors may take legal action including bankruptcy.

Some debt excluded

You will remain liable to pay certain debts – in particular: Student loans, Fines, Debts arising from family proceedings, Budgeting loans and crisis loans owed to the Social Fund.

The overall cost

To be debt free you’d need to repay your debts in full plus maybe some interest and charges; plus maybe fees to the DMC.

No legal protection

A creditor can ignore the DMP and take legal action to recover a debt sooner.

We do not currently provide debt management plans however we can assess your situation and advise on your suitability for other options.

We’ll answer your questions to help you decide if going bankrupt is the right option for you.

Is Going Bankrupt Right For Me?

Going Bankrupt may be best for you if you can’t see how you can ever repay your debts

Free Online Bankruptcy Eligibility Check

Use our free bankruptcy eligibility check to see if declaring bankruptcy could be the best option for you.

Full Detailed Assessment

We’ll provide a detailed assessment based on your personal circumstances, making sure there are no unexpected implications.

Keep Your Home

If you’re a home owner then we can help prevent the loss of your home and any equity you have.

Free Help & Information

We’ll answer your questions to help you decide if declaring yourself bankrupt is in your best interests.

Stop Creditor Pressure

Are you being harassed by chasing letters, and phone calls, have you had debt collectors or bailiffs at your door? We can help protect you from any further creditor action.

Do I Qualify For Alternatives?

We’ll check, explaining the pros & cons of each, helping you make an informed decision on the course of action to take.

Call Our Helpline 0161 843 1515

We’re happy to answer your questions about any situation