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Debt Management Plan

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

A Debt Management Plan (DMP) can be used to gradually pay back multiple debts, and you’ll only have to repay what you can afford. 

A Debt Management Plan is a debt solution that is used to make monthly repayments more affordable. You’ll make a single monthly repayment which will be divided among your creditors. You’ll only repay what you can afford, ensuring you progress out of debt more comfortably. Creditors might stop charging you interest during the lifetime of your DMP. 

Pros of a DMP

  • Streamline multiple debt repayments with single monthly payments
  • You only make affordable repayments, based on your essential household expenses
  • Your DMP can be frequently reviewed so your repayments are always affordable
  • Some creditors will agree to freeze interest and charges during the DMP
  • It is possible to set up a DMP with some charities for free

Cons of a DMP

  • Creditors are not forced to stop applying interest and charges
  • A DMP could make your total debt repayment more expensive if interest and/or charges continue
  • Reducing payments for a long period can further reduce your credit score
  • Creditors are not forced to accept lower repayments and may still send you letters
  • Creditors can still escalate the debt, such as asking for a County Court Judgment (CCJ) 

More information on Debt Management Plans (DMPs)

You should only apply for a Debt Management Plan with a full and complete understanding of how they work. Our MoneyNerd DMP hub has lots of guides and articles discussing everything you need to know about this common debt solution. We also have helpful information for people already using a DMP. 

Are you struggling with debt?
Are you struggling with debt?
  • Affordable repayments
  • Reduce pressure from people you owe
  • Stop interest and charges from soaring