Do It Yourself Debt Management Plan – Complete Guide 2022

Do It Yourself Debt Management Plan

The great thing about debt management plans is how flexible they are when it comes to managing your debts. 

Since a debt management plan (DMP) is an informal debt solution, you can choose to arrange it yourself or via a debt management company. 

In this post, I’ll be detailing the steps you need to take if you’re opting to set up a debt management plan between you and your creditors by yourself. 

How does a Debt Management Plan (DMP) Work? 

In order to set up a debt management plan on your own, it’s important for you to understand its ins-and-outs so you can effectively manage your debts

A debt management plan is an informal agreement between you and your creditors which states that you will make reduced monthly payments towards your debts until they are completely paid off. 

The amount of money you pay in a single monthly payment will be based on what you can afford (what your surplus income is). Your surplus income can be found by subtracting your monthly essential living costs from your monthly income. The surplus income that remains each month will be used for your payments towards your DMP

Your entire budget including your monthly income and monthly essential expenses will be detailed within your payment offer which will be presented to your creditors. Based on this budget, you will offer them your reduced monthly payments. 

Your creditors can then choose to either accept or reject your payment offer. If your payment offer gets accepted, then your debt management plan is put into place and you can start making your monthly payments. 

How do I Set Up a Debt Management Plan on My Own? 

Since a DMP provider isn’t in the picture when you’re setting up a DMP on your own, the process becomes a lot shorter and quicker. 

Step 1: Determining if a DMP is Right for You

The first thing you need to make sure of is whether or not a DMP is even the right debt solution for you or not. 

You can choose to get debt advice regarding this from an independent charity but if you’d like to make your own judgment, then there’s a lot of information available online that can help you do so. 

If you’re looking for debt advice about whether a DMP is right for you or not, then you can go ahead and contact charities such as National Debtline or Payplan

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Step 2: Coming up with a Payment Offer 

Once you’ve determined that a DMP is definitely the right choice for your financial situation, then you have to start planning your payment offer. 

Your payment offer is a document which details what your DMP is going to look like based on your income and essential expenditures. 

You present this to your creditors and they will assess whether or not entering into a debt management plan with you would be a good option or not. 

In order to develop a payment offer that is affordable to you and also acceptable to your creditors, it’s important for you to document your finances well. 

Give complete details about what your monthly income is and what the source of it is. Attach as much documentation as you can to support it. This could be in the form of copies of bank statements and/or wage slips. 

Next, you need to detail what your essential monthly expenditures are. Again, attaching documentation with it can really help your case. This could also be in the form of copies of bank statements. Please note that priority debts cannot be included within a DMP and you have to make payments separately to them. Any payments you make towards priority debts are counted as essential expenditures within your DMP.

Once you’ve figured out your monthly income and your essential monthly expenditures, you can calculate your surplus income that would form the basis for your monthly payments towards your DMP

Please note that in addition to calculating what your monthly payment is going to look like, you’re also going to have to calculate how much of that payment is going to go to each creditor. 

The money from your one monthly payment will be distributed among your creditors on a pro-rata basis. 

This means that a creditor will get the same percentage of your monthly payments as the proportion of debt you owe to them out of your total debt. 

For example, if 50% of your total unsecured debts belong to a single creditor, then that creditor will get 50% of your monthly payments.

In most cases with a DMP, creditors agree to freeze interest and charges. However, if your creditors don’t freeze interest, then the amount you owe is going to be changing depending on the interest rate. So, you’ll constantly have to do these calculations over and over again every month to ensure each creditor is treated fairly. 

Step 3: Call a Meeting with Your Creditors 

Once you’ve successfully made your payment offer, you’ll need to call a meeting with all of your creditors and present them with it. 

If all goes well, then your creditor(s) will immediately accept the offer and you can start making payments towards your DMP

However, if your creditors reject the DMP, you can ask them why that is. There’s a chance they might give you a reason and/or they might even suggest changes to the terms of your DMP which could cause them to accept it. 

If you can comply with the changes that they suggest, you could get your DMP accepted. 

That being said, it’s important to note that your creditors are not obligated to tell you why they rejected your DMP. They could just reject it outright without giving you a reason. 

In that case, you’d have to look towards other debt solutions to take care of your debt. 


One of the main appeals of a DMP is the fact that you don’t have to deal with creditors yourself. That being said, some people like to manage their finances on their own. 

If you’re one of those people, then you should know that while managing a DMP on your own is a lot of work, it can definitely be done with the right planning and approach. 


Do you know your debt free date?
Do you know your
debt free date?
  • Affordable repayments with an end date in sight
  • Reduce pressure from people you owe money to
  • Stop interest and charges from soaring