What is a Debt Management Plan?

A Debt Management Plan is an agreement between you and your creditors to pay all of your debts in full.

Get debt Help

Submit your answers to the below questions to check if you qualify for debt help.

Step 1 - Your Debt

Total amount you owe (please click below)

Less that £5,000
£5,000 to £20,000
More than £20,000

Debt management plans are useful if:

  • You can afford to pay something towards your debts but can’t afford the full payments your creditors are expecting
  • You have debt problems but are unable to afford the full repayment for a period of time
  • You do not want to enter a formal solution
  • You are struggling to keep on top of your current repayments and need to re-structure to regain stability

You can arrange a plan with your creditors yourself or through a licensed debt management company for a fee. If you arrange this with a company you make one repayment to the company and they divide the money to your creditors.

You may incur charges or fee’s from a company to set up a debt management plan however there are some free services you can find through the money advice service, their details are provided at the bottom of the page.

A debt management plan is an informal solution and it aims to put all of your existing creditors ideally into one monthly manageable payment for you.

Benefits


  • One affordable payment to the DMP company
  • Payments can increase or decrease depending on your situation.
  • Creditors can sometimes freeze interest however they do not have to do so.
  • Certain organisations will do this free of charge you can contact the MAS for more information on this.

Considerations


  • For the DMP to be effective all creditors must agree to the arrangement offered.
  • Most providers will charge for this service (Management fees are generally 50% of the first 6 months of payments and a monthly fee on average of £38 per month.)
  • Interest and charges are not guaranteed to be frozen.
  • Your credit rating will be affected.