A Debt Management Plan aims to agree reduced payments to your creditors. Your total debt payments are reduced to an amount you can afford.


Debt management plans are also called a DMP. You can enter this option on your own. Couples can start a joint debt management plan


If your debt payments are too costly, a DMP could help you. Debt management can be useful if your finances have become chaotic.


This option puts your unsecured debts in one place. You make a single payment each month. Debt advice experts deal with your creditors for you.


A longer-term plan is created to clear the debts in full.


The debt management firm acts for you. It sends payments to your creditors. It deals with your creditors for you. It keeps you and your creditors informed if things change.


How Do Debt Management Plans Work?


We work out the amount of money you can afford to pay. We record your income. We budget for your bills. We agree budgets for normal expenses like food and travel.


Any spare money is “surplus income”. This is the money you can afford to pay to your debts.


We contact your creditors. We give them a list of your income and costs. They can see the amount of debt payment you can afford. We offer each creditor their fair share of your payment. A larger share goes to the creditors owed most.


Your creditors are asked to agree to this reduced payment. They’re asked to suspend any debt collection action. They’re asked to stop charging interest on your debts. We keep you informed on their replies.


We review your debt management plan every year. This is because things may have changed. You’ll be asked to help us update your income and costs. You can request a review at any time if something changes. It's vital that we ensure you can still afford your DMP payment.


Benefits of a Debt Management Plan


• Expert advisers deal with your creditors.

• You make a single payment each month.

• Quick set-up process (if required).

• A fair budget for your bills and expenses.

• A clear process.

• Your creditors may agree to stop adding interest charges.

• Your DMP can change. It's flexible.

• Statement provided so you can check your debt level.

• You can end the plan at any time.


Drawbacks of a Debt Management Plan


• Your credit rating will worsen.

• Creditors don't have to agree to your payment offers.

• No promise of frozen interest and charges.

• Collection action may carry on.

• Restricts spending during the plan.

• May take a long time to repay the debts in full.




Debt management plans are effective for many thousands of people. With debts under control, stress and anxiety often reduces. Your money becomes simpler to manage.


It's a flexible option. Some other debt solutions are more rigid.


Many people benefit from interest on the debt stopping. This helps them to clear the debts sooner.


Other debt solutions may provide you with more certainty. Creditors don't have to stop charging you interest. Creditors don't have to stop collection action.


If you owe a lot, a DMP may last a long time.


Want to know if debt management is right for you? Our advisers can tell you. Get in touch for expert advice and support.

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