Debt Management Plan (DMP)
Here at MoneyPlus, we help tens of thousands of UK customers on Debt Management Plans.
- One affordable monthly payment
- Potentially stop interest and charges*
- Reduce creditor contact
- Cancel anytime
* Interest & charges are not guaranteed to be frozen, but we succeed in negotiating this over 95% of the time.
To discover more about how to manage your debt and to receive free debt advice visit www.moneyhelper.org.uk
How can a Debt Management Plan help me?
If you’re struggling to make your monthly payments but have a stable enough income to make consistent, smaller repayments over an extended period, then a Debt Management Plan (DMP) could be right for you. An informal agreement between you and your creditors, it helps you to repay your debts through affordable monthly instalments.
The amount you pay back each month is worked out by reviewing your income and expenditure to calculate what you can realistically afford. Each of your creditors will then be offered your proposed reduced monthly repayment and if they accept it, your debts will be repaid at this rate over an extended period.
A DMP can be a great option for anyone struggling to pay household bills, relying more on an overdraft or credit cards, or consistently getting into arrears. For Debt Management Plan advice, get in touch with us today and we’ll talk you through your options.
What types of debt does a DMP cover?
A DMP will only cover what’s known as non-priority or unsecured debt. This includes debts such as overdrafts, credit cards, payday loans and water bills if paid directly to the water company rather than your landlord. It won’t cover priority debt, a type of debt that can have serious consequences if you don’t pay it, such as income tax, rent, national insurance or a TV licence. It’s important to keep this in mind when deciding if a DMP is right for you, as you will still need to keep paying your priority debts alongside your DMP payments.
Debt Management Plan pros & cons
Before committing to a DMP, it’s important to consider all the advantages and disadvantages. Take your time to research and ask any questions you have about DMPs to one of our advisors.
DMP Pros
- Reduced monthly repayments
- Creditors can freeze interest and charges on your debts
- DMPs aren’t recorded on a public register
- You should receive less contact from your creditors
DMP Cons
- You’re still liable for your full debt
- Creditors can still take legal action
- There are no guarantees that the creditors will accept offers
- Your creditors aren’t obligated to cease contact
- Can affect credit file
Am I eligible for a Debt Management Plan?
If you are interested in taking out a DMP, there is a certain criteria you will need to meet to be eligible. Our trusted advisors are happy to go into more depth and discuss your current circumstances to see which debt solution is best for you. However, the basic requirements include:
- UK residency
- At least £100 in disposable income each month
- At least two unsecured debts
- At least £2,000 in unsecured debt.
How to apply for a Debt Management Plan
If you want to apply for a DMP or learn more about what the process involves, get in touch and one of our friendly advisors will:
Review your financial situation, including your current debts, and provide you expert advice on what solutions are available.
If you choose a solution managed by MoneyPlus Advice, we’ll send you your paperwork and guide you through each step of the process.
We’ll negotiate with your creditors on your behalf to arrange your repayment amounts and request that they freeze your interest and charges
Why choose MoneyPlus Advice?
At MoneyPlus, we have helped thousands of people become debt-free through a variety of debt solutions, including Debt Management Plans.
18,000+
People provided with advice
Jan 2023 – May 2024
£305,000+
Unmanageable debt written-off for vulnerable customers
Sep 2022 – Apr 2024
£19,170
Average total debt per customer on a plan
DMP customers up to April 2024
What debts does a Debt Management Plan cover?
Buy now, pay later
Overdrafts
Credit cards
Store cards
Payday loans
Bank loans
Personalised debt solutions
It’s important you find a debt solution that works for you. That’s why at MoneyPlus we offer bespoke and personal debt solutions, specifically tailored to your needs and requirements. We understand how confusing it can be to navigate the world of debt management and are here to guide you through the process.
We pride ourselves on the individualised support we can offer and understand that no two people’s financial situations are the same. When you contact us, we will take the time to listen to you before advising you on what personal debt solution might be best for you. You can ask us as many questions as you like and we will always make sure you completely understand what you’re agreeing to.
Our priority is helping you achieve financial freedom/clear your debts and manage your finances, through advice from us and the budgeting guides we provide on our website. Find your personalised debt solution with MoneyPlus today.
See some of our real-life DMP success stories
Melanie was £22,000 in debt
One of our satisfied customers is Melanie. She was £22,000 in arrears, and had multiple debts including credit cards, loans, catalogues & buy-now-pay-later debts.
£739
Before entering a DMP, her monthly payments were
£133
As a MoneyPlus Advice customer, she now pays
🎉 That’s a payment reduction of £606!
You can read about some of our other customers’ success stories here.
FAQs
Can you get a mortgage with a DMP?
Mortgage
Having a DMP in place can make it difficult to get a mortgage. The reason for this is that payments towards your debts will show on your credit file, and this may be used against you in a mortgage application.
Remortgaging
Similarly, it can be difficult to remortgage your existing home on a DMP, though there are options depending on the length of your current plan. If your mortgage plan expires, your current lender will likely offer their standard variable rate. While not the best deal, it will allow you to continue making repayments.
Renting
Renting, on the other hand, should be more straightforward. If you keep your rent payments up-to-date and pay off any rental debts that you may have, then a DMP shouldn’t affect your current tenancy.
Can a Debt Management Plan protect me against bailiffs?
While a Debt Management Plan can’t guarantee that bailiffs will no longer come to your door, having an agreed repayment plan in place could help keep your assets safe.
As bailiffs are typically a last resort for lenders, setting up a Debt Management Plan is usually an indication that you plan to repay your debts, and should reduce the risk of legal force.
“It’s made a big difference to me and how I live.“
— Helen, Aberdeenshire *
Read Helen’s story…
How long do Debt Management Plans last?
This depends on your monthly repayment amount, interest and charges (if applicable), and your personal circumstances. The actual amount of time your plan will last could change if your personal circumstances change.
For example, if your income increases, you could increase your payments and reduce the length of your plan. However, if something changes and you need to reduce your payments, this will extend the length of the plan.
Can you pay off your Debt Management Plan early?
DMPs are quite flexible, so you may find that you’re able to pay it off earlier by increasing your monthly payments or paying a lump sum.
If your personal circumstances change and you find yourself coming into money, our internal Settlements Team can help you to get an early settlement figure, which could see you settle your debt for less.
How does a DMP impact your credit score?
A Debt Management Plan will usually lower your credit score as you’ll be paying it back more slowly and in smaller instalments. Potential lenders will therefore see that your debts are being settled this way and may be more reluctant to give you a loan.
Any debts you have will stay on your credit file for six years after the date they’re paid off or defaulted. It is important to note, however, that your DMP won’t be recorded as a separate entry. Instead, creditors may add a marker to show you’re paying back through a DMP.
Can you take out credit while on a Debt Management Plan?
Taking out further credit while on a DMP would impact your monthly expenditure, and could make repayments unaffordable.
When using our DMP services, our expert advisors will help you to set up a realistic monthly budget, which will account for all regular, day-to-day costs that are likely to pop up. We’ll make sure you are left with enough money to cover all of your daily expenses, reducing the need to borrow money.
If you do need to take out a new credit agreement, the lender will run a credit check. Due to the impact on your credit file of making reduced payments, you may be charged a higher interest rate for the credit you take out, or refused credit altogether.
Can you get car finance on a Debt Management Plan?
Whilst there are some car finance companies that accept those on DMPs, you may find that you’re seen as a higher risk by most.
Other debt solutions that can help
There are a number of debt solutions available and you can find more information on all of the below solutions on our website.
Individual Voluntary Arrangement (IVA)
An Individual Voluntary Arrangement (IVA) is a form of insolvency that allows you to write off up to 80% of your debt as an alternative to bankruptcy. It’s a formal solution that can reduce your monthly repayments.
Debt Relief Order (DRO)
A DRO may be a suitable solution for those in England with debts of less than £50,000 (£20,000 in Northern Ireland) and less than £75 a month in disposable income.
Protected Trust Deed
Designed for residents of Scotland, a Protected Trust Deed is a type of formal debt solution that combines debts into one single monthly payment.
Debt Consolidation Loan
Rather than make multiple payments to your creditors, a Debt Consolidation Loan allows you to pay off your unsecured debts by making one monthly payment.