Debt Management Plan (DMP)
A DMP is an informal solution that allows you to negotiate a reduced monthly payment to settle your debts.
What is a DMP?
A Debt Management Plan is an agreement, negotiated by you or a third party, to lower your monthly payments to your creditors.
It isn’t legally binding, unlike other debt solutions, such as an Individual Voluntary Arrangement (IVA). With a DMP, your monthly payments are proposed based on what you can reasonably afford.
What debts can be included in a DMP?
Most unsecured debts, meaning debts that are not tied to an asset such as your home, can be included in an IVA.
- Credit card debts
- Payday loans
- Personal loans
- Unpaid overdrafts
- Rent arrears
- Gas and electricity arrears
- Council tax arrears
- National insurance arrears
Certain debts can’t be included in an IVA, like unpaid court fines, unpaid child support or child maintenance, and student loans in certain cases.
Advantages & Disadvantages
Advantages
✅ Protects you from creditors
✅ Reduces monthly payments
✅ Helps you avoid bankruptcy
✅ Flexible plan
✅ Deals with your unsecured debts
Disadvantages
❌ Not legally binding
❌ No debt write-off
❌ Subject to creditor approval
❌ Takes longer to complete
❌ Not suitable for all debt types