Debt Management Plan (DMP): The Complete UK Guide

What is a DMP?

DMP stands for debt management plan. It is an informal arrangement in which you pay one affordable amount each month, usually to a debt management provider, who shares it fairly (pro rata) between the creditors you owe. Creditors are asked to accept reduced payments and to stop interest and charges while you repay. You still repay the full balance — nothing is written off — but at a pace you can afford.

Because it's informal, a DMP is not a form of insolvency and isn't governed by insolvency law. It's one of the options GOV.UK lists for paying off your debts, alongside formal solutions such as an Individual Voluntary Arrangement (IVA), a Debt Relief Order (DRO) and bankruptcy.

"DMP" can mean other things

If you searched "DMP full form", be aware the letters are used for other things too — a "data management platform" in advertising, or "digital marketing platform", for example. On this page, DMP always means the UK debt management plan. You may also see it described as a "debt repayment plan" or "debt management programme"; the name doesn't matter as much as whether it's free and whether it suits your situation.

Is a DMP a third-party arrangement?

Usually, yes. Most people use a provider (a charity or a company) that deals with creditors and passes on payments. But you can also run a self-managed DMP, writing to creditors yourself with a budget and pro-rata offers. National Debtline has free template letters and guidance for this — see DMP vs a payment arrangement or self-managed plan below.

How a DMP works, step by step

There is no court and no insolvency practitioner. Setting up a DMP with a free provider usually takes a few weeks:

1. Get free debt advice

   A debt adviser looks at your whole situation first. That matters because a DMP is only one option — if you have priority arrears (rent, council tax, energy) or very low surplus income, something else may be better. You can start online with a free service, or find one through the MoneyHelper debt advice locator.

2. Complete a budget

   You list your income and essential spending. Providers use the Standard Financial Statement (SFS), the industry-standard budget format that creditors recognise. What's left after essentials is your surplus — your DMP payment.

3. The provider writes to your creditors

   They send your budget and a payment offer, asking each creditor to accept a reduced pro-rata payment and to freeze interest and charges. You may be asked to send proof of debts and income.

4. You make one monthly payment

   You pay the provider once a month (usually by direct debit or standing order) and they divide it between creditors in proportion to what each is owed. If one creditor is owed 40% of your total debt, they get 40% of each payment.

5. Reviews

   Your plan is reviewed regularly — typically once a year, and whenever your circumstances change. Payments go up if you can afford more, or down if your income falls.

6. The plan ends

   The DMP ends when every included debt is repaid (or settled), or when you decide to end it or switch to another solution.

Can I set up a DMP online with no phone calls?

Usually, yes. The large free providers let you complete the advice process, budget and DMP application online, and you can manage the plan through an online account. Some situations still need a call (for example if information is unclear), but many people never speak to anyone by phone. Be wary of "online DMP" websites that ask for your details and then call you — they are often lead generators (see "Should I trust a free DMP survey?").

Who can get a DMP?

Almost anyone aged 18 or over with non-priority debts they can't afford to repay on the original terms, and some money left over each month after essential bills, can have a DMP. There's no minimum debt, no minimum number of creditors, no upper age limit and no rule about owning or renting your home.

What is the minimum debt for a DMP?

There is no legal minimum. Free providers will consider plans for small debts, although if you only owe a little to one creditor, a direct payment arrangement with that creditor may be simpler. There's also no maximum: you can set up a DMP if you owe £120,000 — but at a typical payment it could take decades, so an adviser will compare it with an IVA or bankruptcy.

Can I have a DMP with only one debt?

Yes. A DMP can include just one creditor. With one debt, though, a provider adds little — you can usually agree the same reduced payment directly with the lender (a "payment arrangement"), using a budget to back up your offer.

How old do you have to be? Is there an age limit?

You must be 18 or over (the age at which you can take on credit). There is no upper age limit — people in their 60s, 70s and older use DMPs. If you're 70 or 75 and a plan would take many years, that's not a reason in itself to refuse one, but an adviser should check whether another option — such as a DRO, or simply token payments where your only income is a pension — fits better.

What happens if I start a DMP in my sixties and it would last 20 years?

You can still have the plan. Your debts aren't passed to your family when you die: they're paid from your estate (what you leave). If the estate isn't enough, unsecured debts in your sole name are generally written off — relatives don't have to pay them unless they're joint borrowers or guarantors. An adviser may suggest reviewing whether a long DMP is the best use of your money compared with other options.

Do you need a positive surplus for a DMP?

Yes. A DMP needs a positive surplus — some money left after your essential spending and priority bills, even if it's small. If your budget shows nothing left (or a deficit), there's nothing to share between creditors, and an adviser will usually look at a Debt Relief Order, asking creditors to accept token payments for a while, or bankruptcy. Compare the first two in DMP vs DRO.

Can self-employed people get a DMP?

Yes. If you're a sole trader, your budget uses your average net self-employed income. Limited company directors can include personal debts (and personal guarantees), but the company's own debts belong to the company — get specialist help from Business Debtline (0800 197 6026).

Can I have a DMP in my sole name if I have a partner?

Yes. A DMP can be in your sole name and include only your debts; your partner's income and contribution to household bills are still part of the budget. Couples with joint debts can have a joint DMP.

Which debts can go in a DMP?

A DMP is for unsecured, non-priority debts. Priority debts — where non-payment can cost you your home, energy supply or liberty — must be dealt with first, outside or alongside the plan.

Some free providers can help with certain arrears as part of an overall plan, but priority debts usually need their own arrangement first. See our guides to council tax arrears, rent arrears and eviction and HMRC debt.

Will a DMP include my car on hire purchase?

Normally no. With hire purchase (HP) or conditional sale car finance, the finance company owns the car until you've paid in full, so if you need the car you keep paying the finance in full, and the payment goes in your budget as an essential cost. A DMP doesn't mean you have to hand the car back, and a DMP provider can't take your belongings. If the HP payment itself is unaffordable, talk to an adviser — you may have options such as voluntary termination.

Can I put only some of my debts in a DMP?

You can, but it's usually not a good idea. Creditors in the plan see from your budget what you pay elsewhere, and they may refuse a reduced offer if another unsecured creditor is being paid in full. Paying minimum payments on credit cards kept outside the DMP, while others get reduced amounts, is generally seen as unfair (preferential). Include all your non-priority debts unless an adviser recommends otherwise.

Can I add a debt to my DMP later?

Yes — if you forget a debt, a debt is passed to a debt collection agency, or a new creditor appears, tell your provider and they can add it and recalculate the shares. If you can't remember all your creditors, check your credit file with the main credit reference agencies; it lists most accounts.

Can I take on new credit or open a catalogue while on a DMP?

Free providers normally ask you not to take new credit during the plan, and it's a common reason creditors withdraw concessions. In practice you'll find credit hard to get anyway. If you need to replace an essential item, talk to your provider first.

How your payment is worked out — and what spending creditors accept

Your DMP payment is your monthly surplus: your income minus essential living costs and priority bills, calculated using the Standard Financial Statement (SFS). The SFS replaced the older Common Financial Statement in 2017 and is used by free and fee-charging providers alike.

What amounts will creditors allow for each spending category?

The SFS groups flexible spending into categories — such as food and housekeeping, travel, personal costs, communications and leisure — and sets "trigger figures" for each category, based on household size. Creditors don't set a fixed allowance for individual items. If your spending in a category is at or below the trigger figure, creditors generally accept it without question. If it's above, you can still include it, but you may need to explain why (for example, a long commute or a special diet). Fixed costs like rent, council tax and energy are counted at what you actually pay. The SFS also allows a small amount for emergency savings, so one broken appliance doesn't derail your plan.

Will £60 a month on smoking be acceptable to creditors?

Creditors don't approve or ban individual items — they look at category totals against the trigger figures. Tobacco spending is usually counted within your everyday living costs. If your total for that category stays within guidelines, it's normally accepted. Be honest: an unrealistically low budget is the most common reason plans fail. If you can cut back, creditors will appreciate a higher payment, but no one can force you to.

Do I have to declare medical expenses?

There is no legal requirement to send details of medical costs. But if you have regular health costs (prescriptions, care, travel to treatment, special diet), including them is in your interest — they justify spending above the trigger figures. You can explain the costs without giving private medical details, and a provider may ask for evidence if the amount is high.

Can I go on holiday on a DMP?

Nothing stops you, and the SFS leisure category allows modest spending. A holiday paid for from a budgeted amount, or by family, is fine. Creditors may question an expensive holiday if your payments are low, and at review it could suggest you can afford more.

Is there a minimum payment per creditor?

Some providers set a minimum total payment or a minimum amount per creditor to make the plan workable, but there is no legal minimum. If your surplus is very small (for example a few pounds per creditor), an adviser may suggest a different solution.

How long does a DMP last?

A DMP lasts until the debts in it are repaid in full — there is no fixed term. The length depends on how much you owe, how much you pay each month, and whether creditors freeze interest. You can shorten it by paying more, using a lump sum or agreeing settlements.

How long will my DMP take to pay off? Worked examples

This table shows how long a DMP would take if all interest and charges are frozen and the payment stays the same (debt ÷ monthly payment, rounded up to the next month):

Fee-charging providers keep part of each payment, so their plans take longer for the same payment. If a creditor keeps charging interest, that debt takes longer too. For your own numbers, try our debt calculator.

Will my debt be written off after a set time on a DMP?

No. A DMP has no automatic write-off date — not with StepChange, PayPlan or any other provider. Debts in a DMP are owed until repaid or settled. Occasionally a creditor agrees to write off a balance — for example where someone is seriously ill or has no realistic prospect of paying — but that's a decision for each creditor, not a feature of the plan. If you want debt written off after a fixed period, the formal options are an IVA (usually 5–6 years), a DRO (12 months) or bankruptcy (usually discharged after 12 months).

I've been paying £1 a month for years on an old DMP — what now?

Token payments (often £1 a month per creditor) are meant as a short-term measure while your situation is uncertain. If you've been paying tokens for a long time and nothing is likely to change, it's worth a fresh review with a free adviser. Depending on your circumstances, the options could include:

• asking creditors to write off the balance, especially if you're on a low fixed income or in poor health;
• offering a full and final settlement if you or family can raise a lump sum;
• a Debt Relief Order if you qualify (debts up to £50,000, low surplus and assets), which writes debts off after 12 months.

Defaults from many years ago will probably have already dropped off your credit file (they're removed six years after the default date), so a write-off or settlement may make little difference to your credit rating now. Note that making payments means the debt doesn't become statute-barred; if you've stopped paying a very old debt and not acknowledged it for six years, read that guide before restarting payments.

DMP providers: free vs fee-charging

You never need to pay for a DMP. Free debt charities set up and run DMPs at no cost to you, and every penny you pay goes to your creditors. Fee-charging DMP companies also exist; they must be authorised by the Financial Conduct Authority (FCA) and must tell you that free debt advice is available.

Free DMP providers in the UK

How do free DMP providers make money? Am I charged?

Free providers don't charge you anything — not to set up, run or end the plan. They're funded mainly by creditors, through voluntary "Fair Share" contributions (a small percentage of the money creditors receive through plans) and grants, including money from the levy that funds free debt advice. This doesn't reduce your payments or the amount credited to your debts.

Fee-charging DMP companies

Commercial "DMP companies" usually charge a set-up fee and/or a monthly management fee taken from your payment before it reaches creditors. That means less goes to your debts and your plan lasts longer. Before signing anything, check:

• the firm is on the FCA Register;
• exactly how much of each payment goes in fees, and for how long;
• whether there's a fee or notice period to end the plan;
• why you'd pay when the same service is free from a charity.

Be cautious with names that sound like a charity or a government scheme. If you're unsure whether a firm charges, ask it directly in writing: "Do you charge me any fee, or take any part of my payment?"

Should I trust a "free DMP survey" or "debt check"?

Treat it with care. Many websites offering a "free debt survey", "free debt check" or a "government-backed scheme" are lead generators: they collect your details and pass them to firms that may sell fee-charging DMPs or IVAs. The survey itself may be free, but the plan you're steered towards may not be. Go directly to a known free provider, or use the MoneyHelper debt advice locator.

Is there a fee for ending a DMP?

Not with a free provider — you can end the plan at any time at no cost. Some fee-charging firms may have exit terms or notice periods in their contract, so check your agreement. Before ending a plan, make sure you have a replacement arrangement with creditors, or interest and collection activity could restart.

Can I switch from a fee-charging DMP to a free one?

Yes. Contact a free provider first; they can set up a new plan and tell your creditors. Then cancel the old plan (and its payment) so you don't pay twice.

Interest, your credit file and public records

Will interest be frozen, and for how long?

Creditors are asked to freeze interest and charges, and most FCA-regulated lenders do — but they don't have to. FCA rules (the Consumer Credit sourcebook, CONC) require lenders to treat customers in financial difficulty with forbearance, and freezing interest is a common way they do that. A freeze typically lasts as long as the plan is running and payments are kept up, although some creditors review it periodically. A creditor may take a few months to confirm, and some reduce rather than stop interest. Ask your provider which creditors have frozen interest, and see our guide to freezing interest on debts.

If I leave the DMP and pay a creditor myself, can interest be added back?

It can. The freeze is a concession linked to your arrangement, so if you leave the plan, the creditor can review its terms. Many will keep the freeze if you set up a direct payment arrangement at the same level, but get this confirmed in writing before you switch. Interest that was frozen in the past isn't normally added back retrospectively.

Can a DMP pay less than the contractual minimum payment?

Yes — that's the point of a DMP. Your payments are based on what you can afford, not the minimum payment in your credit agreement. Because you're paying less than agreed, creditors report this to the credit reference agencies (see below), and they're not obliged to accept it, though most do when it's backed by an SFS budget.

How does a DMP show on my credit file?

A DMP itself isn't usually a separate entry; each account in it is reported by the creditor. Accounts are typically marked as an "arrangement to pay" (AP), and many creditors go on to register a default. Some lenders also add a flag to show a debt management arrangement. This makes new credit hard to get while the plan runs.

A default stays on your file for six years from the default date, then disappears — even if you're still paying the debt through the plan. That's why an early default can actually help your credit file recover sooner. You can check your file for free with the main credit reference agencies.

Does a DMP show up on public records?

No. A DMP isn't registered on the Individual Insolvency Register, isn't published in The Gazette and doesn't appear on the Register of Judgments. It only appears on your credit file through the way creditors report your accounts. (IVAs, DROs and bankruptcies do appear on the Insolvency Register.)

Is a DMP a form of insolvency or an "act of bankruptcy"?

No to both. A DMP is an informal arrangement, not an insolvency procedure. "Acts of bankruptcy" were a concept in old bankruptcy law that no longer exists in England and Wales, and a DMP doesn't make you bankrupt or start any court process.

What if a form asks if I'm in an "arrangement with creditors"?

Read the exact wording and answer honestly. Some applications (for jobs, tenancies, mortgages, or certain professional roles) ask only about formal insolvency — bankruptcy, IVAs, DROs, or "a composition or arrangement with creditors" in the legal sense. A DMP isn't one of those. But if the question asks about any debt management plan or informal arrangement to repay creditors, a DMP counts and you should say yes. If you're unsure what the question means, ask the organisation. Giving false information can cause bigger problems than the DMP itself.

Will a DMP affect my job or my home?

Usually not. Employers don't need to be told and won't see it unless they run a credit check (some financial-sector roles do). Your home isn't at risk from the DMP itself — but creditors could still apply for a County Court Judgment and later a charging order, which is rare when you're making reasonable payments.

Life on a DMP: changes, lump sums and settlements

What happens if I earn more while on a DMP?

Tell your provider. Your budget is reviewed, usually once a year, and your payment normally goes up so creditors share in the improvement — which also shortens the plan. A small rise that's swallowed by higher bills may not change much. If your income drops, the payment can be reduced instead.

What happens if I get a lump sum during a DMP?

You can use it to clear debts faster, or to offer full and final settlements — one-off payments that creditors accept in place of the full balance. A lump sum doesn't legally have to go to your creditors in a DMP (unlike in an IVA or bankruptcy), but if you keep it and your payments stay low, creditors may question your plan at review. It's fair to offer any settlement to all creditors pro rata rather than paying one off in full. Check whether a windfall affects any benefits.

Can I settle a DMP early for less than I owe?

Yes, if creditors agree. Creditors often accept less than the full balance for a lump sum, particularly on older debts or those bought by debt purchasers — but there's no guaranteed percentage and they don't have to accept. Always get the agreement in writing before paying. Your free provider can usually negotiate settlements for you, including if you've been on a plan for 12 years or more. See our full and final settlement guide.

Can I pause my DMP?

You can ask. Providers can arrange a reduced payment or short payment break if, for example, you lose your job, have a new baby or face an emergency — creditors are usually told and asked to hold interest. Creditors don't have to agree, and a long break can lead to defaults or collection activity restarting. Pausing payments to save up a settlement fund is possible but riskier: discuss it with your provider first so creditors know what's happening.

Can I have more than one DMP? Can I split a DMP?

Normally you have one DMP covering all your non-priority debts — two plans at once would mean some creditors being treated differently. You can't usually split a plan in half between two providers. Couples can have a joint plan for joint debts, or separate plans for debts in each person's sole name.

Can creditors refuse a DMP or pull out?

Yes. Because a DMP isn't legally binding, a creditor can refuse your offer, continue to add interest, or withdraw later. Most accept reasonable, well-evidenced offers; if one refuses, your provider usually keeps paying that creditor its share anyway, which shows good faith if it ever goes to court.

What could cause my DMP to be cancelled?

• missing payments without explanation;
• taking out new credit during the plan;
• not responding to reviews or giving inaccurate information;
• a creditor (or several) withdrawing because the offer is too low;
• a change in your circumstances making another solution more suitable.

If your provider is worried about your plan, it will usually contact you first. Ask for a review rather than letting payments lapse.

Can I get Breathing Space while setting up a DMP?

Setting up a DMP doesn't automatically give you Breathing Space. But a debt adviser can apply for a standard Breathing Space (up to 60 days) before your plan starts, which pauses most enforcement and freezes most interest and charges while you get the DMP in place. You can only have a standard Breathing Space once in any 12 months.

Do creditors still get paid while the DMP is being set up?

They should. Providers usually ask you to start paying as soon as the budget is agreed — even before every creditor has replied — so creditors see payments arriving. Keep paying priority bills throughout.

The downsides — what can go wrong

DMP vs other debt solutions

For detail, read IVA vs DMP, DMP vs DRO and DMP vs bankruptcy.

DMP vs a payment arrangement or self-managed plan

A payment arrangement (sometimes called a monthly payment arrangement) is an agreement with one creditor to pay a reduced amount. A DMP does the same across all your creditors at once, with one payment shared pro rata. A self-managed DMP is a DMP you run yourself: you send each creditor your budget and pro-rata offer, and pay them separately each month. It costs nothing and gives you direct control, but means more admin and letters. Many people prefer a free provider to deal with creditors for them; National Debtline can help if you want to do it yourself.

DMP vs debt consolidation

A consolidation loan replaces your debts with one new loan. It can work if you're keeping up with payments and can get a lower total cost, but if you're already behind, you're unlikely to be approved — and a DMP doesn't require any new borrowing.

Is a DMP right for you?

Frequently asked questions