# Debt management plans explained: free help to repay what you owe

> Debt help · Last updated 23 June 2026

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## Quick answer

A debt management plan (DMP) is an informal agreement where you make one monthly payment to a debt charity, which distributes it to your creditors. Payments are reduced to an affordable level and charities like StepChange offer DMPs for free.

A DMP is one of the most accessible debt solutions in the UK. It is not a formal insolvency procedure — it is an arrangement negotiated on your behalf with creditors. You pay what you can afford each month until the debts are cleared. Because it is informal, creditors can still chase you if they choose not to participate.

## Key facts

- DMPs are informal — creditors are not legally bound to accept reduced payments or freeze interest
- Free DMPs are available through StepChange, National Debtline, and PayPlan
- Commercial DMP providers charge fees — free charity DMPs are always preferable
- A DMP stays on your credit file for six years from the date of default on each account

## How a DMP works

A debt adviser reviews your income, expenses, and debts. They calculate an affordable monthly payment and propose it to each creditor.

You make one payment to the DMP provider, which distributes it to creditors. Many creditors agree to freeze or reduce interest once a DMP is in place.

## Free vs commercial DMPs

StepChange, National Debtline, and PayPlan offer DMPs at no cost. Commercial providers charge monthly fees that reduce the amount going to creditors.

Always use a free provider. Commercial DMP fees can add years to your repayment timeline.

## DMP vs other debt solutions

A DMP suits people who can afford reduced payments and want to repay in full over time. It is not suitable if you cannot afford any meaningful payment.

For unaffordable debt, formal options like an IVA, DRO, or bankruptcy write off debt rather than stretching repayment over many years.

## Frequently asked questions

### Will a DMP affect my credit score?

Yes. Reduced payments are recorded as partial settlements or defaults on your credit file, remaining for six years. This makes future borrowing harder.

### How long does a DMP last?

Typically 5–10 years depending on debt levels and payment amounts. There is no fixed end date — it lasts until debts are repaid.

### Can creditors refuse a DMP?

Yes. DMPs are informal. Creditors can reject reduced payments and continue pursuing the full amount. Most major creditors participate, but some may not.

## Primary source

https://www.gov.uk/options-for-paying-off-your-debts

## Related

- [IVA explained](https://moneyguide.org.uk/debt-help/iva-explained/)
- [Priority vs non-priority debts](https://moneyguide.org.uk/debt-help/priority-vs-non-priority-debts/)

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