1. What Is a Debt Management Plan (DMP)?

A DMP is an informal agreement between you and your creditors allowing you to repay your unsecured, non-priority debts via a single affordable monthly payment managed by a provider. Creditors are asked—but not required—to freeze or reduce interest and charges.

Not sure if a DMP or an IVA suits you better? Start with our free check below and we’ll compare paths like writing off unaffordable balances where eligible.

2. How Does a DMP Work?

1. You share your income, expenses, debts;
2. Your provider calculates what you can afford;
3. You pay one monthly amount to the provider;
4. The provider distributes payments to creditors;
5. Creditors may freeze interest or stop enforcement.

It's not legally binding; you can stop at any time. If you need legal protection immediately, consider Breathing Space or a formal solution like an IVA.

3. Who Qualifies for a DMP?

Typically suitable if you:

• Have unsecured debts like credit cards, loans, overdrafts, catalogue debts, or utility arrears;
• Can afford to pay at least a few pounds per month per creditor;
• Prefer an informal path over formal insolvency (like an IVA or DRO).

If you’re dealing with bailiffs or court action, we’ll map a safe route first, then place suitable debts into a DMP.

4. Benefits & Risks of a DMP

Advantages

• Simplifies payments into one monthly amount.
• Often reduces or freezes interest and charges.
• Reduces creditor pressure like bailiffs or legal demands—while not guaranteed.
• Flexible—can adjust to changing finances.
• No formal court process involved.

Drawbacks

• Credit report may show accounts as “in an arrangement,” which can lower your score.
• No legal protection—creditors can still take action if issues arise.
• Creditors might refuse to freeze interest.
• Fee-charging providers increase your total costs and slow repayment.

5. Creditor Behaviour: What Typically Happens

• Interest & charges: Many creditors freeze or reduce them once payments start, but it’s not guaranteed.
• Token payments: Where income is very tight, short-term token offers may be accepted while a full plan is set.
• Contact reduces: Letters/calls usually fall once regular payments are received.
• Reviews matter: If your budget changes, request a review quickly to prevent arrears and unwanted action.

Outcome varies by creditor and your circumstances. We’ll explain likely scenarios before you proceed.

6. Choosing a DMP Provider

Look for:

• FCA authorisation — ensures adherence to standards.
• No upfront or monthly fees where possible — reputable free providers exist.
• Trade association membership for extra protections.
• Clear communication of charges, cancellation rights, and services.

We’ll help you pick a provider whose approach fits your situation and goals.

7. Alternatives & Related Solutions

Individual Voluntary Arrangement (IVA)

Formal, legally binding arrangement lasting 5–6 years. May include debt write-off after completion. Learn more about IVAs here and whether you can write off unaffordable debt.

Debt Relief Order (DRO)

For low-income, low-asset individuals. Debts are frozen for 12 months before being written off. Explore our DRO guide.

Breathing Space (Debt Respite Scheme)

Provides 60 days of legal protection from enforcement and interest while you get advice. Start with our Breathing Space overview.

Other methods

Debt consolidation, balance transfer cards, snowball or avalanche methods—all situational and may involve new borrowing. If you’re juggling utility debt or high-cost credit, we’ll weigh these carefully against risks and eligibility.

Real-Life Stories

Jane, Stoke-on-Trent — From £14,200 to Control

Unsecured debts: £14,200 across cards & a personal loan. We helped Jane start a DMP with an affordable £160/month. Four of five creditors froze interest within eight weeks. Compared with minimum payments, her repayment timeline dropped from ~10+ years to an estimated 74 months—a saving of roughly 50+ months and thousands in interest (subject to creditor cooperation).

Jane also used our Online Plan Tracker to monitor balances and requested a review when energy bills rose—keeping her plan realistic.

Amir, Leeds — Variable Income, Flexible Plan

Seasonal contractor with fluctuating income. We set an initial DMP payment of £110/month with the ability to temporarily reduce to £70 during quiet months and increase to £140 in peak periods. This flexibility helped Amir avoid arrears and kept enforcement at bay, while shortening his estimated term by ~18 months compared with ad-hoc payments.

Sophie, Cardiff — Priority Arrears First, Then a DMP

Sophie had energy arrears and council tax pressure alongside £9,600 in credit cards. We arranged Breathing Space to pause enforcement and prioritised council tax, then placed non-priority debts into a DMP at £125/month. Outcome: stress down, bailiff risk addressed, and a clear plan to completion.

Callum, Glasgow — Scotland Example

£17,400 across cards and overdraft. Chose a DMP at £155/month. Three of four creditors froze interest within six weeks; estimated horizon reduced from 9.5 years to 82 months. If income changes, we’ll compare Trust Deed (Scotland) vs continuing DMP.

Stories are illustrative and anonymised; outcomes depend on individual circumstances and creditor decisions.

Fee vs Free: What It Really Costs

Say you owe £12,000. A fee-charging provider takes £30/month as their management fee. Over 5 years, that’s £1,800 diverted from your creditors—plus any set-up fee (e.g., £100) brings the total to ~£1,900. Those pounds could have cut months off your plan or offset interest where it isn’t frozen.

With a free DMP provider, every pound goes further. We’ll explain the true cost of each route upfront—and when a formal option like an IVA or DRO could write off unaffordable debt faster than a fee-based DMP.

Online Plan Tracker & Progress

See your journey clearly

• Online Plan Tracker: Check balances, payments to each creditor, and your estimated completion date at a glance.
• Budget updates: Adjust income/outgoings and request reviews when costs rise (e.g., rent, utilities).
• Notifications: Alerts when a creditor freezes interest or a payment posts.
• Documents hub: Store letters, statements, and settlement offers securely.

Prefer phone or WhatsApp? We’ll update you in the way that works best.

Priority Debts: What to Do First

Emotional Support & Regular Reviews

Debt affects sleep, focus and relationships. We build routine check-ins into every plan to reduce stress and keep you in control.

Review rhythm

• Annual review by default to keep payments realistic.
• On-demand reviews if your income/expenses change (job shift, new baby, rising bills).
• Wellbeing first: If collection pressure spikes, we prioritise protective steps and speak to creditors.

Extra support (signposts)

If money worries impact your mental health, try Mind, the NHS, or Samaritans (116 123, free 24/7). You’re not alone.

Trusted Resources

For independent guidance alongside our free support, explore:

• MoneyHelper – What is a DMP?
• Citizens Advice – Debt Management Plans
• StepChange – Free DMPs
• PayPlan – Debt Management Plans
• National Debtline
• FCA Register – Check a firm
• GOV.UK – Breathing Space (Debt Respite)

9. How Fresh Start Debt Support Helps You

• We assess your entire debt & income situation free and without pressure;
• Advise if a DMP is best—or recommend IVA, DRO, or Breathing Space;
• Help choose a trusted, FCA-authorised provider;
• Explain every step, cost, and impact on your credit;
• Support with budgeting, creditor communication, and progress tracking via our Online Plan Tracker;
• Provide ongoing help to rebuild your finances and avoid future debt problems.