Debt Management Plan
Debt management plans are not right for everybody, but there are times when it can be the ideal solution for people who find themselves unable to keep up with their bills and debt payments.
This guide will help you understand what a debt management plan is, how it works, and whether or not a debt management plan is the right solution for your financial situation.
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To find out more about managing your money and getting free debt advice, visit Money Helper, an independent service set up to help people manage their money. National Debt Advice is not associated with Money Helper.
What is a DMP?
A debt management plan (DMP) helps you to manage your debts and pay them off at a more affordable rate by making reduced monthly payments.
Benefits and Risks
Benefits of a DMP:
You’ll only pay what you can afford to your creditors
If you’ve fallen behind with your household bills you can add the arrears to your DMP to help, get your accounts back up to date. You'll still need to make your regular ongoing monthly payments.
You'll make one monthly payment to the DMP fir, and they will manage the payments to your creditors for you
Your DMP will be reviewed regularly to make sure you’re paying what you can afford
Risks of a DMP:
Some of your creditors may still contact you
Most creditors will agree to reduce or stop interest and charges, but they don’t have to
If creditors continue adding interest and charges, this could increase the total amount you currently owe
Your creditors don’t have to agree to your reduced payments, but we’ll still send your payments anyway
Other debt solutions you could qualify for:
A legal process that can provide relief for those struggling with debt.
A legally binding arrangement in Scotland. Read more...
A legal process that can help people in England and Wales.
Government Debt Respite Scheme.
Why choose National Debt Advice?
We can reduce your monthly payments!* Not only that but we're:
Have a 24/7 Live Chat Support
Have excellent reviews on Trustpilot
We give impartial and confidential advice
*Monthly payments are based on individual financial circumstances.