Contact us
0800 567 0056
Live Help

Request a Call Back

What is a DMP?
  • A DMP or 'Debt Management Plan' is an informal agreement with creditors to make reduced affordable monthly payments.
  • It is based on a realistic budget that allows a debtor to pay all their priority bills and normal living expenses and pay what is left to their creditors.
  • Though not obliged to and not guaranteed, most creditors will agree to reduce or freeze interest so that the money the debtor pays reduces their debt more quickly.

  • Disadvantages
  • Fees
  • Key Facts

Advantages of a DMP:

  • One realistic affordable monthly payment.
  • The debtor doesn't deal with their creditors that stress is taken away.
  • Interest and charges are often frozen though this is not guaranteed.
  • It is an informal agreement, so it can be changed when or if needed.
  • It is discreet; no one is made aware other than the creditors.
  • No need to borrow more money each month to meet basic living costs.
  • An asset or home will not be at risk provided mortgage payments are kept up to date.

Disadvantages of a DMP:

  • No debt is written off, the debt is paid in full.
  • As the monthly payments are reduced it takes longer to pay off the debts.
  • It will affect your ability to obtain credit in the future, though this can improve once you have paid your debts in full. All credit history is recorded on the debtor's credit file for 6 years.
  • Creditors are not under any legal obligation to suspend interest or late payment charges.
  • Secured debts (i.e. mortgages and car HP) and Crown Debts such as Council Tax cannot be included in a DMP.


Fees may be charged by a DMP provider, but these will be taken from the normal monthly payment into the plan.

If fees are charged, they would cover the initial set up of the plan, negotiation with creditors, budget analysis, reviews and the management of all creditor communications, payments in and distributions out to creditors.

There are organisations that will provide 'free to client' services. Some of these are funded by creditors and others are charitable organisations.

Debtors will be fully informed by their authorised debt solution providers of any fees that are applicable before signing an agreement.

Key Facts

Important considerations for debtors considering a debt solution:

  • Fees may be charged but these will be fully explained before any agreement is made to proceed.
  • Stopping payments to creditors may create further arrears.
  • It is likely that the ability to get credit will be affected.
  • In compliance with Distance Selling Regulations there is a 14 day cooling off period in which a plan can be cancelled.
  • Not all solutions involve debt write off
  • Assets and property could be at risk with some solutions.
  • Conditions apply and each application will be subject to acceptance and eligibility.
DMP Step by Step Guide

Step 1

You give permission to be contacted by an authorised debt management company as you wish to find out if you can apply for a DMP.


Step 2

We gather some basic information from you including personal details, details of your creditors and your income and expenditures. This will be forwarded to the debt management company so they can contact you and provide you with regulated debt advice.

Step 3

The debt management company will then call you and explain fully all of the options you have available including the DMP. They will also check through the supporting paperwork you provide proving your situation; this would include documents for proof of income, bank statements and proof of identity.

Step 4

The debt management company will negotiate with your creditors having created a budget that outlines how much you can pay each month. They will also request that interest and charges be frozen, though it is not guaranteed that creditors will do this.

Step 5

The debt management company will manage all communications with your creditors as well as your payments in and disbursements out to creditors each month. They will conduct annual reviews to check for changes in your situation and where necessary re-advise you.

Step 6

You continue to pay a single payment to the debt management company until the debt is paid in full or until your situation changes. You may be contacted by the creditors directly, but you can refer them to the debt management company.


Creditors are often open to settlement offers that allow you to write off some of your debt informally. The debt management company can propose settlements to one or more of your creditors if you have a lump sum.

An example of how a DMP can work

Before the DMP:
Gillian had unsecured debts totalling 15,620 over 8 different creditors.

  • Monthly contractual payments = £546
  • Interest charges per month = £260
  • So the actual amount coming off her balance each month was just £286
  • Further credit was being taken each month as the payments were unaffordable.

Monthly budget summary:

  • Income: £1,450
  • Expenses: £1,250
  • Available to pay towards debts: £200

Gillian realised she was using further credit to be able to pay the basic payments on her credit cards and loans and was getting further into debt.

Solution DMP:
Jerry requested a meeting with an authorised debt solution provider (debt management company) to see if a DMP would work for him. The debt management provider reviewed all the possible solutions with Jerry looking at the risks and benefits of each. Gillian was keen to avoid a formal solution like an IVA and pay the total debt back in an affordable structured way. There was also a chance that an IVA would affect her career, so she chose debt management:

  • Monthly Payment: £200
  • Monthly management fee: £30
  • Distribution to creditors: £170

Estimated term in this DMP (assuming all interest and charges are frozen) would be 92 months or 7 years 8 months. Estimated fees would be £2,760 and estimated total repaid £18,380.

For more information about the fees charged in a DMP click here

Important information

This website provides information only. Vincent Bond & Co does not provide debt advice. If you wish to apply for any of the debt solutions outlined in this website Vincent Bond will with your permission pass your details to a licenced debt solution provider. You will then be called by an advisor who will discuss your options in more detail. During this telephone call and subsequent communication, you will be dealing with a debt solutions partner and not Vincent Bond & Co Ltd. Fees may be charged by the debt solution provider if you enter a debt solution with them. Vincent Bond will not charge you a fee, but may receive a referral fee from the debt solution provider if you agree to use their services.

We take reasonable care to ensure that the information on this website accurate. However, the user of this website should not rely on the information or take its accuracy for granted. Vincent Bond & Co does not accept liability or responsibility for and gives no warranty as to the accuracy of the information on this website. The provision of the information on this website does not constitute debt advice or recommendation and Vincent Bond will not accept any liability for any action taken by a user relying on the information provided in the website. Use of the information in this website is at the users own risk. Your statutory rights are not effected by this disclaimer.

The Insolvency Service has issued a guide to dealing with creditors for those struggling with debt: In debt - dealing with your creditors.

To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.