Setting up a debt management plan

A DMP is an informal agreement between you and your creditors to give you longer to pay back your non-priority debts.

You make one affordable monthly payment and this is divided fairly among your creditors.

If you come to us for your DMP, when we ask your creditors to accept lower payments, we’ll also ask them to freeze interest and charges. We can’t guarantee they’ll agree to this, but they usually do.

It’s important to bear in mind that a DMP may affect your credit rating as creditors are likely to report that you’re not making your full contractual monthly payments.

Before deciding on a DMP, it’s a good idea to get free, impartial debt advice. 

A debt adviser will talk you through your options and let you know if a DMP is right for you. 

Debt management companies and debt charities can help you set up a DMP. They are regulated by the Financial Conduct Authority (FCA). A legitimate organisation will have an FCA reference number on their website. You can cross-check this on the FCA register.

It’s also a good idea to read customer reviews to see what other people have to say about the organisation’s service.

Some organisations offer free DMPs and some charge a fee. Debt management companies have a responsibility to be clear about any fees they charge before you sign up for anything. 

Your provider will collect details of all your debts and run through your income and spending to work out how much you can afford to pay towards them each month.

They’ll then come up with an affordable plan and check you’re happy with it before taking it to your creditors.

If your creditors accept the terms of the DMP, it will be set up as agreed.

You’ll then make one payment each month towards your debts and your provider will divide it fairly among your creditors.

This arrangement will continue until your debts are paid off in full.

Your provider will need the following paperwork to set up your DMP:

• proof of income to confirm you can afford the payments
• reference numbers for your debts
• payment details e.g. a signed direct debit agreement

a signed DMP agreement so they can make payments to your creditors on your behalf

This will largely depend on how quickly you can provide the information needed.

At the end of 2024, it was taking us an average of:

• 10 days to get to the point where customers were returning the paperwork we need to act on their behalf
• 13 days to get 80% of the creditor information we need so we can begin negotiating the terms of the DMP
• 47 days for customers to make their first payment (this may seem like quite a long time but that’s only because after a DMP is set up, people tend to make their first payment at the end of the following month)

If you decide you’d like to get a free DMP from us, you can complete the vast majority of the process online. Find out more in our guide Setting up a DMP online.