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Re10 - Freephone 0800 169 1536 - Lancaster, Leeds, York, Manchester, Birmingham, Plymouth, London, Maidstone


Debt Management Plan (DMP)


What is a debt management plan?
What fees will I have to pay?
Advantages & Disadvantages
Is this solution right for me?

What is a debt management plan (DMP)?

A debt management plan is an informal arrangement with your creditors which allows you to make reduced repayments to your lenders (creditors) over a number of years.

Payments are made until the debt is cleared in full or until you are able to make the full repayments again.

The monthly repayments are based on what you can afford after a realistic income and expenditure has been drawn up.

What fees will I have to pay?

There are various organisations to whom lenders and government organisations will encourage you to contact in order to enter into such an arrangement. These organisations will receive monthly payments from you and make pro rata distributions to your creditors for you. Some of these organisations are registered charities that are funded by the main lenders and some are privately owned. Despite some of their claims, the services they provide are not free of charge; just like an IVA, their costs are funded by your creditors.

A typical fee will be the first three months payment that you make and also an ongoing monthly management fee of 20% to 25% of the payments you make.

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Advantages Disadvantages
  • You make payments that you can afford.


  • Your payments can be reviewed every so often so that any changes to your situation can be taken into account.


  • Can be used to tide you over until your financial situation improves.


  • It can be drawn up by you.
  • They are not legally binding.


  • Creditors are free to take whatever legal proceedings against you they wish at any time.


  • It is common practice for creditors to continue to obtain county court judgments, a third party debt order or a charging order against a debtor's property; even when they are making every effort to pay.


  • Interest is not always frozen and, as you are in default, will continue to accrue at penal rates.


  • You may never be rid of your debt.


  • You must pay your creditors in full.


  • It will be noted on your credit record.

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Is this solution right for me?

Debt Management Plans are normally suitable if your total unsecured debt is £15,000 or less. Re10 will discuss the suitability of this option with you in the context of your personal circumstances.

If you are not sure about the extent of your problem then try filling in our Debt Calculator

This will help you calculate how much money you have left over each month to pay your debts (creditors).

For specialist, confidential advice contact the Re10 helpline on 0800 169 1536.

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