What is a Debt Management Plan?
A Debt Management Plan (DMP) is an informal arrangement between you and your creditors to repay your debts at a rate you can afford. It’s designed for non-priority debts like credit cards, personal loans, and overdrafts.
By consolidating your repayments into one manageable monthly payment, a DMP helps simplify your finances.
At Debt Free Associates Limited, we act as a trusted intermediary, negotiating with your creditors to potentially freeze interest and charges.
How does the Debt Management Plan work?
Assessing your budget
We start by reviewing your income and essential expenses to calculate what you can afford to pay toward your debts each month.
Making payments
You make a single monthly payment to us, and we distribute it to your creditors based on the agreed terms.
Negotiating with creditors
Our team communicates directly with your creditors, proposing a repayment plan tailored to your financial situation. We also request that they freeze interest and charges.
Flexibility
A DMP is flexible, so if your financial circumstances change, we can adjust your plan to ensure it remains manageable.
Is a Debt Management Plan right for me?
A DMP may suit you if:
You are struggling to keep up with non-priority debt repayments (e.g. credit cards, personal loans, store cards).
You have a steady income and can commit to regular monthly payments.
You want a flexible solution that can adapt to your changing circumstances.
It may not be suitable for:
Priority debts like mortgage arrears, council tax, or utility bills.
Individuals seeking debt forgiveness or legal protection from creditors.
Our advisers will assess your situation and guide you in determining if a DMP is the best option for you.
Benefits
- Simplified payments:
Make one manageable payment each month. - Negotiation with creditors:
We handle all communications and work to freeze interest and charges. - Flexibility:
Adjust your plan if your financial situation changes. - Support:
Access ongoing advice and assistance throughout your plan.
Considerations
No guarantees:
Creditors are not legally obliged to accept the plan or freeze charges.
Impact on credit score:
Your credit rating may be affected while the plan is active.
Fees:
Fees will apply. See our terms of business
Examples of debts that can be included*
Credit & Store Cards
Personal loans
Catalogues
Overdrafts
Buy Now, Pay Later
Payday loans
Examples of debts that may be included*
Utility bill Arrears (gas, electric, water)
HMRC debts (self-assessment)
Benefit overpayments (DWP or local authority)
Council Tax Arrears
Rent arrears
Debts to friends or family
Examples of debts that cannot be included*
Child maintenance arrears
Student loans
Secured loan arrears
Court fines
Mortgage arrears
Car financing arrears (including PCP & HP)
Faqs
A DMP is a flexible, informal plan that helps you repay non-priority debts at a rate you can afford.
No, credit card accounts included in the DMP will be frozen or closed until your debts are cleared.
Your credit score may decrease while the plan is active. However, consistent payments can help rebuild your score once your debts are cleared.
If you cancel, creditors may resume charging interest and pursuing collection efforts.
Yes, our advisers help you create a realistic monthly budget to regain financial control.
The duration depends on the total amount of debt and your agreed monthly payment. It continues until all debts are repaid.
In most cases, creditors will stop contacting you once the plan is agreed upon. If they don’t, we can help address their concerns.
As long as you keep up with your mortgage payments, your DMP won’t affect your existing mortgage. However, applying for a new mortgage during a DMP might be more challenging.
Yes, you can leave a DMP at any time. However, your creditors may start adding interest and charges again, and collection efforts could resume.
How can Debt Free Associates Limited help?
Our knowledgeable team can assess the best option for you and connect you with trusted partners who can administer the arrangement.
Contact us today or use our live chat for immediate assistance.