Debt management plan (DMP)
A Debt Management Plan (DMP) allows you to pay off your debts at a rate you can afford. Find out more about how it works and which debts you can use it for. You can also talk to a free debt adviser about whether it’s the best way to pay off or clear your debts.
Speak to a free debt adviser
Use our Debt adviser locator tool to find free and confidential debt advice online, over the phone or near to where you live.
A debt adviser will:
- treat everything you say in confidence
- never judge you or make you feel bad about your situation
- suggest ways of dealing with debts that you might not know about
- check you’ve applied for all the benefits and entitlements available to you.
Three quarters of people who get debt advice feel more in control of their finances afterwards.
How a Debt Management Plan works
A Debt Management Plan (DMP) might be for you if you have non-priority debts like credit or store cards, overdrafts or personal loans. Your DMP provider will help you work out an affordable payment and talk to your creditors.
You usually need to have at least £5 or more to pay to each of your creditors, although this amount can vary between providers.
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.
Find out more in our guide How to prioritise your debts.
Who offers Debt Management Plans?
Many free debt advice organisations can help you decide if a DMP is right for you and some can also arrange a plan to ensure that all the money you pay into it goes towards paying off your debts.
If you choose a fee-paying provider, it’s important to know that all DMP 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 using the Financial Services Register on the FCA website
This article is provided by the Money Advice Service.
The content of this Factsheet has been created by and is provided by The Money Advice Service and is produced under licence from them.
Please be aware there are links contained within this factsheet that may take you to external sites, we are not responsible for their content. This is a general advice and information factsheet only and should not be treated as a definitive guide and does not constitute legal or professional advice. We are not a law firm and information is not intended to create a solicitor client relationship. Law Express and The Money Advice Service does not accept any responsibility for any loss which may arise from relying on information contained in this factsheet. This is not a substitute for legal advice and specific and personal legal advice should be taken on any individual matter. If you need more details or information about the matters referred to in this factsheet please seek formal legal or financial advice.
The Money Advice Service is not regulated by the Financial Conduct Authority and the Money Advice Service does not provide a regulated service. The information and tools that the Money Advice Service provides are generic and should be of general assistance to you in managing your finances. However, the money advice service cannot recommend specific financial products and always recommends that you seek further information from an independent financial adviser, and/or further information from the providers of specific financial products.
This factsheet is correct at time of going to print. The law set out in this factsheet applies to England and Wales unless otherwise stated.
