Debt Management Plan

A Debt Management Plan (DMP) is an informal agreement with your creditors to pay back non-priority debts at a rate you can afford. You make one monthly payment to a DMP provider, who distributes it to your creditors. Unlike formal solutions, a DMP is flexible and can be adjusted if your circumstances change.

Here is how a Debt Management Plan works: 1. You contact a DMP provider (choose a free provider) 2. They assess your income, expenses, and debts 3. They calculate what you can afford to pay each month 4. They contact your creditors to propose reduced payments 5. You make one monthly payment to the provider 6. The provider distributes the money to your creditors Creditors may freeze interest and charges, though they are not obliged to.

A DMP might be suitable if:

• You can afford to make regular payments
• You have non-priority debts (credit cards, loans, overdrafts)
• You want to avoid formal insolvency
• You prefer a flexible arrangement
• Your circumstances may improve in future

A DMP is not suitable for priority debts like rent, mortgage, council tax or utility bills.

Benefits of a Debt Management Plan:

• One affordable monthly payment
• Flexible - can be adjusted if circumstances change
• Creditors may freeze interest and charges
• No formal insolvency record
• Can be set up quickly
• Free DMP providers available
• You pay back what you owe

Before starting a DMP:

• It is not legally binding - creditors can still take action
• It may take longer to pay off debts
• It will affect your credit rating
• Not all creditors will agree to freeze interest
• Some providers charge fees (always use a free provider)
• You must budget carefully to maintain payments

Important: Always use a free DMP provider. Fee-charging companies take money that should go to your creditors.

Free providers include:

• Debt Free Advice
• StepChange Debt Charity
• National Debtline
• PayPlan

Never pay fees for debt advice or debt management plans.

We offer free Debt Management Plans with no fees. Our advisers can:

• Assess if a DMP is right for you
• Set up and manage your plan
• Negotiate with your creditors
• Adjust payments if your situation changes

Contact us today for free, confidential advice.