Debt Management Plan (DMP)
A Debt Management Plan (DMP) helps you manage your debts and pay them off at a more affordable rate by reducing monthly payments. If you feel a DMP is the best option, a DMP can be administered fee-free from StepChange Debt Charity.
A DMP can be an excellent way to repay if you are struggling, and the debts can be cleared within a reasonable timescale on a reduced payment structure.
Free and impartial money advice is available from the Money Helper, an organisation set up by the Government for people in debt.
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A Debt Management Plan (DMP) is an informal agreement between you and those you owe. Unlike other options, a DMP is not legally-binding, and it is, therefore, essential to remember that your creditors are not obliged to agree to your proposal.
Scroll down for a list of Frequently Asked Questions.
Simply complete the form to see if you qualify for any of the available debt solutions.
A friendly & experienced advisor from DSD will contact you to discuss yourc ircumstances.
They will explain all your options, so that you can decide which solution works best for you!
An informal arrangement between you and your creditors that lets you make lower monthly payments, whilst still paying the total amount of debt.
A formal agreement between you and your creditors. You make affordable monthly payments over fixed period with debt written off at completion.
A Debt Relief Order (DRO) is a formal debt solution for those who have no assets such as car or property. Eligibility criteria does apply.
A DMP is an informal agreement between you and your creditors to pay all your debts. There is no fixed duration, and you will continue to make payments until all debts are paid in full- there is no debt forgiveness.
You make reduced monthly payments towards your debts. This means a DMP is suitable for people struggling to keep up with their normal debt payments but still have money available after all essential living expenses are paid.
A DMP may be suitable for you if you can still afford to make payments towards your debts, after you create a budget to cover essentials such as food, utilities, and transport.
A DMP is usually arranged on your behalf by a third-party provider, for example a debt charity or debt management company. This means you will make a single monthly payment to the DMP provider and they will contact all your creditors and send each of them a share of your payment every month.
Unsecured debts will be included in your DMP. This includes things like personal loans, store card debts and overdrafts. Priority debts, like most household bills, your mortgage, or a debt where court action has already been taken, will not usually be included in a DMP, and you should keep paying these at the agreed amount.
Creditors can still contact you during your DMP and can continue the debt collection process. Creditors can still take action against you during the DMP and frozen interest & charges on debts is not guaranteed.
A DMP is not explicitly registered on your credit file, but the reduced payments could impact a few different areas of your credit file. Details of court action, defaults or missed payments will be removed six years from the date it happened, even if the debt has not been fully repaid.
You should not take out any further credit while trying to repay your debts through a DMP. Doing so could be a “breach” of your DMP agreement, as you cannot make the minimum payments on your debts.
Your credit history is likely to be affected by being on a DMP. However, it will not affect the people you live with unless you have joint financial products or debts. This would be something like a loan, bank account or household bills that are in joint names. A financial association’ will link your credit files if this happens. Your record of making reduced payments may affect the other person’s credit file and their ability to get credit.
Unlike bankruptcy, DMPs are available across the UK. So regardless of where you live in the UK, if you are struggling to keep up with payments to your debts, a DMP could help you to get your financial situation back on track.
You can apply for a DMP by clicking here.