Featured in...

Debt Management Plan – Ultimate Guide

This is your ultimate guide to Debt Management Plans. We explain exactly what they are and how to get one below, answering the most common Debt Management Plan questions in the process. You must read this before applying! 
Could you legally write off some debt? Answer below to get started.

Total amount of debt?

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

Welcome to your ultimate guide on Debt Management Plans (DMP) for 2023. If you’re trying to find the best way to handle your debts, you’re in the right place.

We’ll explain:

  • What a DMP is and how you can get one.
  • What to do if you’re worried about your debts.
  • How a DMP works and how long it might last.
  • What could affect the length of your DMP, and what happens when it ends.
  • The pros and cons of a DMP, and how it might affect your credit file.

We understand that dealing with debt can be hard, as many people share your worries about choosing the right debt solution. Our website is here to help. Over 170,000 people visit us each month to get guidance on debt solutions.

Some people in our team have dealt with debt too, so we know what it’s like and we’re here to share our knowledge and experience with you.

Let’s take a deep breath and start our journey towards managing your debts in 2023.

Could you legally write off some debt?

There are several debt solutions in the UK, choosing the right one for you could write off some of your unaffordable debt, but the wrong one may be expensive and drawn out.

Answer below to get started.

How much debt do you have?

This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.

What is a Debt Management Plan? 

A Debt Management Plan (DMP) is a non-legally binding debt solution used to pay back multiple non-priority debts through an ongoing single monthly repayment. 

It is used when you cannot afford to pay back your unsecured debts as initially agreed so need to agree on a lower repayment with creditors to avoid arrears or worsening arrears. 

Sometimes a Debt Management Plan will freeze the interest on repayments, making repayments even more affordable. 

What is an Informal Debt Management Plan?

An informal Debt Management Plan is the same as a Debt Management Plan. A DMP is an informal debt solution, which means it’s not legally binding to either the debtor or creditors. 

This is why they’re sometimes called an Informal Debt Management Plan. However, there is no such thing as a formal Debt Management Plan. A comparable formal debt solution is an IVA.

You can read about IVAs and other debt solutions by hopping back to our debt solution hub

How does a Debt Management Plan work?

A Debt Management Plan works by the debtor agreeing to pay a single monthly repayment which is then split between multiple creditors. The way the payment is divided between creditors could be based on how much you owe each of them. 

Most of the time, the DMP is set up by a third-party company or debt charity (more on this later!)

As part of the Debt Management Plan, it’s encouraged for creditors to freeze interest on the debt and any other charges to help the debtor pay off their debts over a reasonable time without causing financial hardship. 

The Debt Management Plan will continue until all debts have been paid. 

As this is an informal debt solution with no legal weight, creditors can choose to terminate the agreement at any time and try to recover arrears using legal action. However, this will usually only happen if you miss DMP repayments. 

For a greater understanding of how they work, consider reading our Debt Management Plan example. 

How a debt solution could help

Some debt solutions can:

  1. Stop nasty calls from creditors
  2. Freeze interest and charges
  3. Reduce your monthly payments

A few debt solutions can even result in writing off some of your debt.

Here’s an example:


Monthly income £2,504
Monthly expenses £2,345
Total debt £32,049

Monthly debt repayments

Before £587
After £158

£429 reduction in monthly payments

If you want to learn what debt solutions are available to you, click the button below to get started.

Get started

» TAKE ACTION NOW: Fill out the short debt form

Debt Management Plan criteria

There aren’t any formal Debt Management Plan criteria you have to meet to apply for a DMP because DMPs are informal agreements. 

That being said, it will be up to your creditors to agree to or reject your DMP proposal.

Your creditors are more likely to accept your DMP proposal if they believe you’re doing your best to pay your debts and there are no suitable alternatives. This is why you will submit a monthly budget and evidence of your debts when asking for a DMP.

Debt management plan calculators will help during part of preparing an application. 

Last but not least, you should check that a DMP is the best option for you. It might be the case that other debt solutions will be more advantageous and could even write off your debts, such as a Debt Relief Order (DRO). 

Can I get a Debt Management Plan if I’m in Scotland?

You can consider a Debt Management Plan if you live in Scotland, but you might want to consider a Debt Arrangement Scheme instead. 

This debt solution is exclusive to Scottish residents and works similarly to a DMP. A key difference is that it’s legally binding, so your creditors cannot change their mind. But neither can you without consequences.

Thousands have already tackled their debt

Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.


I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.

Get started

Reviews shown are for The Debt Advice Service.

Can I get a Debt Management Plan if I’m self-employed?

Self-employed people can ask for a Debt Management Plan, but proving their exact level of income can be more complicated. 

Consult our self-employed DMP guide for support if you’re a sole trader considering a DMP. 

How long can you be on a Debt Management Plan?

Debt Management Plans usually last until your debts have been repaid. 

What could affect the length of my Debt Management Plan?

The length of time this will take depends on multiple factors, including the size of your debts, the amount you can afford to repay each month and whether interest has been frozen or not. 

Long-term DMPs lasting many years may not be the most advantageous debt solution. You could save money or even write off some of your debt using a different debt solution.

Payment holidays could also affect the duration of the DMP. A DMP payment holiday is an agreement between you and your creditors included in the DMP to not have to make monthly payments for a fixed period. 

For example, this could be granted if you lose your job to give you some short-term respite without causing the DMP to fail. 

What happens when a Debt Management Plan (DMP) ends?

When a Debt Management Plan ends and you’ve repaid all of your debt, nothing else will happen. You’ll be free from the debt included in the DMP and shouldn’t be contacted by any of those creditors again or asked to pay any more. 

When the DMP ends because the creditor withdrew from the agreement – possibly because you missed DMP payments – the creditors you still owe can chase you for payments again. You can choose to make full repayments again if possible.  

They might use debt collection agencies (not bailiffs!) or send legal threats. They could even take you to court and ask a judge to force you to pay via a court order. 

Do I have to include all debts in a Debt Management Plan?

You should include all debts within your DMP proposal even if you think there are some debts you can still comfortably repay outside of the DMP. 

If you include all debts within the DMP, you show creditors that you’re treating them all equally and they’re more likely to accept the DMP proposal. 

What is a debt management company?

A debt management company is a commercial business that will help you set up a Debt Management Plan with your creditors and hopefully get them to cancel the interest applied to your debt. 

They will take care of all negotiations directly with your creditors so you don’t have to. You will need to provide the company with your monthly budget and evidence of financial information for them to work for you. 

Debt management companies don’t work for free. They may charge you an initial fee and then take a percentage of your monthly DMP payment, which will make it take longer to get out of all your debt.

Where can I find Debt Management Plan reviews?

Check out our DMP company reviews, it’s best to use forums and read other people’s genuine experiences. 

We’ve listed the three best forums to find DMP company reviews to help you research diligently. 

Can I set up a debt management plan directly with my creditors?

You don’t have to use a debt management business to set up a Debt Management Plan. You can set one up directly by communicating with your creditors and providing them with a proposal. This is also known as a DIY Debt Management Plan. 

This might be daunting and you might not get the best results compared to the negotiators from a debt management company. But it will allow you to get a DMP for free with no (ongoing) service fees. 

MoneyNerd has also made it easier for you to complete a DIY DMP with our DMP proposal letter template. Download this template and add your details to make a compelling case to your creditors. 

Alternatively, speak to debt charities who can often set up a DMP with creditors on your behalf and sometimes for free!

How to apply for a Debt Management Plan

If you’re not using a debt management company or a debt charity to apply for a DMP, you will need to contact all of your creditors separately to ask if they will accept your DMP proposal. 

You should contact them to ask for the DMP by providing a detailed breakdown of your monthly budget and essential living costs, including all debt repayments you have to make.

You’ll still need to provide this information when you use a debt management company or debt charity to apply for a DMP, but you’ll be submitting it to the company or charity instead of directly to multiple creditors. In these cases, you might be able to submit your DMP documents online. 

What expenses are included in a Debt Management Plan?

As part of the DMP application, you will need to outline your essential expenses. These are expenses that you need to maintain a reasonable standard of living or to stay employed. For example, rent, groceries and fuel to drive to work or other transport costs are considered as DMP expenses.

What to do if creditors refuse a DMP

If creditors refuse your DMP, you could make a second proposal submitting more evidence showing how the proposal is the best possible solution and how you’re doing your best to repay. Or you could consider different debt solutions.

More information and support are provided in our DMP refusal guide

How long does it take to set up a Debt Management Plan?

Most Debt Management Plans can be set up within two to three weeks. Some complications can extend the DMP approval timeline. 

Are Debt Management Plans a good idea?

Debt Management Plans can be a good idea for some debtors, but it all depends on individual circumstances. There are times when other solutions should be used over a DMP, such as if the debts are so significant they will take a long time to repay using a DMP. 

Debt Management Plan Pros and Cons

The pros and cons of DMPs should be understood before applying. The benefits of using a DMP are:

  • 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

But keep in mind these drawbacks of using 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) 

Will a DMP show on a credit file?

It’s possible that creditors will ask credit reference agencies to add a record to your credit file stating that you have an active DMP. But in any case, the missed payments leading to the DMP will already be recorded. 

How long will a Debt Management Plan stay on a credit file?

A DMP and any payment defaults will remain on your credit file for six years. During this time it can be more difficult to get approved for credit, even if the DMP has ended. 

Can a Creditor Get a CCJ Against Me While I’m in a DMP? 

Because a DMP is an informal debt solution with no legal weight, creditors could still choose to abandon the DMP agreement and ask a judge for a CCJ to force you to pay

However, it’s extremely rare for this to happen if you have agreed a DMP and kept up with all monthly payments. 

Can a Debt Management Plan stop bailiffs?

A DMP is likely to prevent an escalation and stop creditors getting a CCJ issued to make you pay. Consequently, the DMP could stop any further debt enforcement action, such as the use of bailiffs. 

However, there are no guarantees with this informal debt solution. Creditors could change their mind and try to recover the money with a CCJ and then ask a court to use bailiffs. 

Is it possible to get a credit card while in a Debt Management Plan?

You can technically apply for a credit card while using a Debt Management Plan but the credit card lender will need to check your credit file, which could result in a rejection.

Moreover, it’s not advisable to take out more credit while you’re struggling to repay existing debts. 

Can I get a mortgage with a Debt Management Plan? 

It will be harder to get a mortgage if you have an active Debt Management Plan, but it’s not impossible. 

You can read more about this on our DMP mortgage page. 

Can you get a joint Debt Management Plan?

Yes, you can get a joint DMP, which may be useful if you have multiple lines of credit with the other person. Interestingly, you can add single debts to a joint DMP as well, as long as the other person agrees to this. 

How will my Debt Management Plan affect my partner?

Partners are not often affected by their spouse taking out a DMP in their name. DMPs are only used on unsecured debts, so joint mortgages won’t be included within the DMP. 

Of course, some situations can be more complicated. We discuss this topic in further detail in our Will a DMP Affect my Partner? blog. 

Debt Management Plans vs Bankruptcy – Which Is best?

If you can pay off your debts with a DMP, it’s best to use this method over bankruptcy. But if the DMP would have to last for many years to pay off the debt, other debt solutions – including bankruptcy – might be the better option. 

DMPs and bankruptcy are vastly different so they’re not easy to compare. 

Debt Relief Order vs Debt Management Plan – Which Is best?

A Debt Relief Order might be better than a DMP if you have no assets and minimal disposable income each month. A DRO could write off all your debts after one year, so it’s worth considering this before committing to a DMP. 

Debt Management Plan (DMP) vs IVA? – which Is best?

An IVA is similar to a DMP but it’s a formal legally-binding debt solution. An IVA might be more suitable for some people. Work out what you should do by speaking with a debt charity and reading our DMP vs IVA guide

What’s the difference between a Debt Management Plan and Debt Settlement?

Debt settlement is vastly different to a DMP. Debt settlement is when you agree on a figure to pay off a debt in a lump sum payment for less than what you owe, sometimes around 70% of the debt’s true value.

Will a Debt Management Plan (DMP) affect my job?

A DMP won’t affect your job. Employers don’t get told when you enter a DMP and you’re not obligated to tell them

Does a Debt Management Plan (DMP) affect renting?

In general, a DMP shouldn’t significantly decrease your chances of finding a new place to rent. But there can be some complications if your credit score is checked as part of the rental application. Find out further details here

Other DMP FAQs

Could you legally write off some debt?

Answer below to get started.

How much debt do you have?

This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.