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Debt Management Plan

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How a Debt Management Plan works

A Debt Management Plan (DMP) allows you to pay off your debts at a rate you can afford.

It’s suitable if you have non-priority debts like credit or store cards, overdrafts and personal loans.

Your DMP provider will help you work out an affordable payment and talk to your creditors.

You make one monthly payment to the DMP provider who then pays your creditors for you.


Which debts can I pay off with a Debt Management Plan?

You can only use a Debt Management Plan for non-priority debts.

These include:

  • overdrafts
  • personal loans
  • bank or building society loans
  • money borrowed from friends or family
  • credit card, store card debts or payday loans
  • catalogue, home credit or in-store credit debts.

Which debts can’t I pay off with a Debt Management Plan?

You can’t use a Debt Management Plan to pay off priority debts.

These include:

  • court fines
  • TV Licence
  • Council Tax
  • gas and electricity bills
  • child support and maintenance
  • Income Tax, National Insurance and VAT
  • mortgage, rent and any loans secured against your home
  • hire purchase agreements, if what you’re buying with them is essential.

Who offers Debt Management Plans?

Many free debt advice organisations can arrange a Debt Management Plan to ensure that all the money you pay into it goes towards paying off your debts.

This means you could be debt free sooner than you’d hoped.

Free debt advisors give expert advice to hundreds of thousands of people every year and will understand the situation you are in.

They are highly trained and will be able to give you the support you need to manage and reduce your debts.

If you choose a fee-paying provider, you should be aware that all Debt Management Plan providers must be authorised by the Financial Conduct Authority (FCA) to ensure they meet agreed standards.

Before you agree to take out a plan with a fee-paying provider, check they have been authorised.

Check if a Debt Management Plan provider is authorised