This is an informal agreement between you and the creditors you owe money to. This means that, unlike IVA, DRO or Bankruptcy, its findings are not legally enforced. In DMP, you may be able to negotiate lower repayments over a longer period of time, but it is important to realize that your creditors are not legally obliged to agree to your offer, freeze interest, or suspend any ongoing legal action. Therefore, it is important to get unbiased advice on whether the DMP is the right solution in your situation.

You can negotiate DMP terms with your creditors yourself or use the services of a specialized company that manages your debt.

There are two main types of DMP:

  • Fee charging – which is where you pay a management fee, typically between 10% to 15% of your monthly payment. Companies that charge fees argue that they provide a superior service, which justifies the additional cost.
  • Non-fee charging – which is where the full amount of your monthly payment goes towards paying off your debts. Because there is no monthly management fee to pay, your debts will be paid back sooner than if you used a fee charging company.

Advantages of DMP

  • Possibility to set smaller monthly payments
  • Some creditors may agree to retain interest
  • Your home is not at risk if you can keep up payments.
  • None of your family, friends or colleagues need to know about this solution

Disadvantages of DMP

  • This is not a legally binding contract
  • Not all creditors agree to retain interest
  • The payback period will increase (you must make sure you’re happy with this).
  • All fees related to running the DMP will increase your debt 
  • DMP may affect your credit score


Where DMP is available, there may be other options that are available and suitable for you.