Debt Management Plan FAQs

A Debt Management Plan (DMP) is an informal agreement to repay your unsecured debts at a rate you can afford.

It combines your debts into one monthly payment. We assess your budget, take a fee, and share the rest between your creditors.

It doesn’t include secured debts like mortgages, which you’ll need to continue paying separately.

Because you’re paying less than originally agreed, it may take longer to repay your debts and could cost more overall. Your credit rating is also likely to be affected.

We review your income, spending and debts to work out what you can afford.

We then contact your creditors to offer reduced payments and ask them to freeze interest and charges — they don’t have to do this, but many do.

You make one monthly payment to us, and we distribute it fairly between your creditors on a pro rata basis.

Read our guide on how a Debt Management Plan works for a step-by-step explanation.

A DMP could be an option if:

• you’re struggling to keep up with repayments
• you have one or more unsecured debts
• you have a regular income
• you can afford a reduced monthly payment

The amount of debt matters less than whether you can afford to repay it.

The first step is to speak to us.

We’ll review your financial situation, explain your options clearly and help you decide if a DMP is right for you. If you go ahead, we’ll set up your plan and begin contacting your creditors.

Creditors don’t have to accept a DMP.

However, many do accept reduced payments when they can see:

• your budget has been assessed by a debt adviser
• the payment is fair
• you’re paying as much as you can realistically afford

If a creditor doesn’t accept, we’ll continue negotiating and may discuss alternative options with you.

Yes. We manage communication with your creditors on your behalf.

This includes making repayment offers, handling correspondence and resolving issues. Some creditors may still contact you directly, but you can let them know you’re on a DMP with Money Advisory Centre and pass the details to us.

You can include most unsecured debts, such as:

• credit cards
• personal loans
• overdrafts
• store cards and catalogue debts
• some utility arrears

Secured debts and student loans can’t be included and will need to be paid separately.

Your payment is based on what you can afford after covering essential living costs.

We use pro rata payments, which means each creditor receives a share based on the size of your debt. Larger debts receive a larger share of your monthly payment.

A DMP lasts until your debts are repaid in full.

The length depends on how much you owe and how much you can afford to pay each month. Because payments are reduced, it usually takes longer to repay your debts and could cost more overall.

Yes. Making reduced payments means you’re not meeting your original credit agreements.

This is likely to affect your credit rating and may make it harder or more expensive to get credit in the future.

We’ll ask your creditors to freeze interest and charges.

They don’t have to do this, but many do. If they aren’t frozen, your debts may increase while you’re repaying them.

We charge a fee for setting up and managing your DMP.

This fee is taken from your monthly payment and covers:

• setting up your plan
• contacting and negotiating with your creditors
• distributing your payments
• ongoing support and reviews

We’ll always explain any fees clearly before you decide to go ahead.

Yes, you can speak to your creditors yourself if you’re confident managing your budget, negotiating with them and making multiple payments each month.

We do this for you as part of our service, which is why we charge a fee.

Your plan is flexible.

If your income or spending changes, your payment can be reviewed and adjusted. We’ll look to agree any changes with your creditors.

Yes. A DMP is not legally binding, so you can cancel at any time.

If you decide it’s no longer right for you, we’ll talk through your options.

Your DMP is confidential.

Only you, us and your creditors will be aware of your plan, unless you choose to tell others.