# DMP vs IVA — which UK debt solution should you choose?

> Compare · Last reviewed 26 May 2026

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## Quick answer

A DMP is an informal arrangement to pay an affordable monthly amount to all your creditors via a free debt charity. An IVA is a formal, legally binding agreement to pay an agreed amount over (usually) five years, after which remaining qualifying debt is written off.

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Both are routes out of unaffordable unsecured debt. Always start with free regulated debt advice before signing up to anything — StepChange, National Debtline and Citizens Advice all give it for free and there is no upside to using a fee-charging firm.

## Debt Management Plan vs Individual Voluntary Arrangement

| Criterion | Debt Management Plan | Individual Voluntary Arrangement |
| --- | --- | --- |
| Formal arrangement | No — informal | Yes — court-approved, legally binding |
| Who runs it | Free debt charity (or fee-charging firm) | Licensed Insolvency Practitioner (fees come out of payments) |
| Typical length | However long it takes to repay in full | Usually 5 years (6 if no equity released) |
| Debt written off at end | No — pay back everything | Yes — remaining qualifying debt written off if you complete |
| Credit file impact | Marked as 'arrangement to pay' for 6 years | Recorded on Insolvency Register; on credit file for 6 years |
| Public register | No | Yes — Individual Insolvency Register |
| Can be cancelled | Yes — anytime | Failure can lead to bankruptcy |
| Suits debt level | Roughly £5,000–£20,000 | Roughly £15,000+ (no fixed minimum) |

## When Debt Management Plan suits

- Your situation is temporary and you can repay in full eventually
- You want flexibility to cancel and restart
- You're not eligible for or don't want an IVA's formality

## When Individual Voluntary Arrangement suits

- You can't realistically repay everything within a reasonable time
- Your debts are larger and from multiple creditors
- You want creditor action to stop while you pay
- You can commit to ~5 years of disciplined payments

## Frequently asked questions

### Will a DMP or IVA affect my job?

Most jobs are unaffected. Some regulated roles (financial services, law, military commissions) require employer notification or can be restricted by an IVA — check your employment contract.

### Are debt charities really free?

Yes. StepChange, National Debtline (run by the Money Advice Trust) and Citizens Advice are funded by donations from the financial sector and government grants. You will never be charged for advice or for setting up a DMP.

### What happens if I can't keep up payments on an IVA?

Speak to your Insolvency Practitioner immediately. They may agree a variation (reduced payments or extended term). If the IVA fails, creditors can take recovery action and you may face bankruptcy.

## Sources

- [MoneyHelper — Debt solutions](https://www.moneyhelper.org.uk/en/money-troubles/dealing-with-debt)
- [Insolvency Service — Individual Insolvency Register](https://www.gov.uk/government/publications/individual-insolvency-register)

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.