Debt Management Plan (DMP)

✅ One affordable monthly payment

✅ Potentially stop interest and charges*

✅ Reduce creditor contact

✅ Cancel anytime

* Interest & charges are not guaranteed to be frozen, but we succeed in negotiating this over 95% of the time.

If you’re struggling to make your monthly payments but have a stable enough income to make consistent, smaller repayments over an extended period, then a Debt Management Plan (DMP) could be right for you. An informal agreement between you and your creditors, it helps you to repay your debts through affordable monthly instalments.


The amount you pay back each month is worked out by reviewing your income and expenditure to calculate what you can realistically afford. Each of your creditors will then be offered your proposed reduced monthly repayment and if they accept it, your debts will be repaid at this rate over an extended period.


A DMP can be a great option for anyone struggling to pay household bills, relying more on an overdraft or credit cards, or consistently getting into arrears. 

What is a DMP?

DMP Advantages

  • Reduced monthly repayments
  • Creditors can freeze interest and charges on your debts
  • DMPs aren’t recorded on a public register
  • You should receive less contact from your creditors

DMP Disadvantages

  • You’re still liable for your full debt
  • Creditors can still take legal action
  • There are no guarantees that the creditors will accept offers
  • Your creditors aren’t obligated to cease contact
  • Can affect credit file

DMP FAQs

  • Can you get a mortgage with a DMP?

    Mortgage


    Having a DMP in place can make it difficult to get a mortgage. The reason for this is that payments towards your debts will show on your credit file, and this may be used against you in a mortgage application.



    Remortgaging


    Similarly, it can be difficult to remortgage your existing home on a DMP, though there are options depending on the length of your current plan. If your mortgage plan expires, your current lender will likely offer their standard variable rate. While not the best deal, it will allow you to continue making repayments.



    Renting


    Renting, on the other hand, should be more straightforward. If you keep your rent payments up-to-date and pay off any rental debts that you may have, then a DMP shouldn’t affect your current tenancy.

  • Can a Debt Management Plan protect me against bailiffs?

    While a Debt Management Plan can’t guarantee that bailiffs will no longer come to your door, having an agreed repayment plan in place could help keep your assets safe.


    As bailiffs are typically a last resort for lenders, setting up a Debt Management Plan is usually an indication that you plan to repay your debts, and should reduce the risk of legal force.

  • How long do Debt Management Plans last?

    This depends on your monthly repayment amount, interest and charges (if applicable), and your personal circumstances. The actual amount of time your plan will last could change if your personal circumstances change.


    For example, if your income increases, you could increase your payments and reduce the length of your plan. However, if something changes and you need to reduce your payments, this will extend the length of the plan.


  • Can you pay off your Debt Management Plan early?

    DMPs are quite flexible, so you may find that you’re able to pay it off earlier by increasing your monthly payments or paying a lump sum.


    If your personal circumstances change and you find yourself coming into money, our internal Settlements Team can help you to get an early settlement figure, which could see you settle your debt for less.


  • How does a DMP impact your credit score?

    A Debt Management Plan will usually lower your credit score as you’ll be paying it back more slowly and in smaller instalments. Potential lenders will therefore see that your debts are being settled this way and may be more reluctant to give you a loan.


    Any debts you have will stay on your credit file for six years after the date they’re paid off or defaulted. It is important to note, however, that your DMP won’t be recorded as a separate entry. Instead, creditors may add a marker to show you’re paying back through a DMP.


  • Can you take out credit while on a Debt Management Plan?

    Taking out further credit while on a DMP would impact your monthly expenditure, and could make repayments unaffordable.


    When using our DMP services, our expert advisors will help you to set up a realistic monthly budget, which will account for all regular, day-to-day costs that are likely to pop up. We’ll make sure you are left with enough money to cover all of your daily expenses, reducing the need to borrow money.


    If you do need to take out a new credit agreement, the lender will run a credit check. Due to the impact on your credit file of making reduced payments, you may be charged a higher interest rate for the credit you take out, or refused credit altogether.


  • Can you get car finance on a Debt Management Plan?

    Whilst there are some car finance companies that accept those on DMPs, you may find that you’re seen as a higher risk by most.