A Debt Management Plan (DMP) is an informal debt restructuring solution for unsecured debt. If you owe money to more than one creditor then a DMP could be right for you.
DMPs are provided by debt management companies or charitable organisations who could negotiate with your creditors to try to get them to accept lower repayments and freeze any further interest that might otherwise be added to your current debt. There is an option to pay a fee for this service with a debt management company or you can seek advice and/or assistance from the free sector, such as a charitable organisation.
Disadvantages of a DMP
Advantages of a DMP
Is a DMP right for me?
A DMP can be a good debt solution, especially if your problems are likely to be short term. It may be suitable if you have available income each month once your priority costs have been met e.g. food, accommodation and utility bills.
If this is not the case you may need to consider a formal insolvency solution, such as an IVA, to deal with your debts.
For more information about debt management read our Frequently Asked Questions pages.