Debt Management Plan (DMP)

Debt management plans are administered by a debt management company (DMC) who negotiates with your creditors and manages your payments to them. This arrangement is called a debt management plan (DMP).

Informal Agreement means not subject to any legally binding contract or legislation.

How Debt Management Works

You tell the DMC about you financial situation; about your household income; outgoings; other financial commitments, assets and debts. This is to determine your disposable income.

Disposable income is how much you can afford to pay your unsecured creditors once you’ve met your living expenses and essential financial commitments.

An Debt management plan may be suitable if:-

  • You’re struggling to repay afford your debts as you’re being asked and/or you’re making just minimum payments, but;
  • You can repayment them in full over a reasonable time (not more than 8-10 years).
  • You have at least 2 different creditors and you own more than about £2000.

The DMC explains your situation to your creditors asks your creditors to freeze interest and charges and accept reduced payments based on the disposable income. How much each creditor receives is pro-rata basis based on the amount owed to each.

Any creditor can choose not to accept any offer – they are under no obligation to do. Such creditors can be paid anyway via the DMP; they can’t refuse payments. However they can add charges and take legal action to recover the debt; or you can make arrangements to pay them in full outside of the plan.

Most major creditors will stop interest and charges once hardship and willingness to commit to reasonable payments is established.

Debt Management Fees

A DMC may or may not charge fees; which would be taken from payments before they are shared between creditors. Typically; there is a setup fee and an on-going management fee.

Duration of a debt management plan

The DMP lasts for however long it take to repay all debts in full. This depends on payments made into the plan; how much is taken by the DMC in fee and the extents creditor suppression of interest and charges.

Dent Management Benefits


You pay your debts at a rate you can afford which is fair to all parties.


You can increase and possibly lower payments as ability to pay changes; you are not tied into a contract.

A Single regular payment

You make a single regular payments to the DMC, which distributes payments to all creditors

Negotiations on your behalf

Creditors prefer to deal with reputable DMCs over individuals so there is a great chance of success.

Debt Management Considerations

Negative impact on credit rating

You’ll not be making payments as per original credit agreements and this will be reported to the credit reference agencies.

Implication of DMP failing

Your situation may change and you may not be able to agree lower payments. Creditors may take legal action including bankruptcy.

Some debt excluded

You will remain liable to pay certain debts – in particular: Student loans, Fines, Debts arising from family proceedings, Budgeting loans and crisis loans owed to the Social Fund.

The overall cost.

To be debt free; you’d need to repay your debts in full; plus maybe some interest and charges; plus maybe fees to the DMC.

No legal protection

A creditor can ignore the DMP and take legal action to recover a debt sooner.

We do not currently provide debt management plans however we can assess your situation and advise on your suitability for other options.

Money Helper (formerly The Money Advice Service) is a free service set up by the Government to help people make the most of their money. If you would like to learn more click here. is not regulated and is for fact-finding only. We can help assess your circumstances and point you to someone who can provide available options that suit your debt criteria.

If an individual meets the required criteria for an IVA based on our packaged case, this will be passed to one of our partnering Insolvency Practitioners to get direct advice. If the individual does not meet the criteria for an IVA, The Insolvency practitioner is able to provide contact information for other third-party organisations that offer advice on other available debt solutions. For full details view our Privacy Policy.

If you decide that an IVA (Individual Voluntary Agreement) is not the best option for you after we have prepared the necessary information, you can opt out of the process and have all of your details removed. We receive a fee from the third party that we refer you to for introducing you and for the work we have completed. However, you will not be responsible for paying this fee. The third party will contact you directly to continue the process of your IVA application or to explore other solutions, but only with your permission after we have introduced you.