Finance glossary
Debt Management Plan — DMP
Also known as: DMP
In simple terms
A debt management plan is an informal arrangement to pay off your non-priority debts at a lower monthly amount you can actually afford, usually through a single payment shared out between the people you owe.
On this page
What does debt management plan mean?
A debt management plan (DMP) is an informal agreement to repay your non-priority debts — such as credit cards, loans and overdrafts — at a rate you can afford. You make one monthly payment, which is divided between your creditors.
A DMP can be set up for free through charities such as StepChange or National Debtline; you do not need to pay a fee-charging company.
How a debt management plan works
A provider works out what you can afford after essential costs and negotiates reduced payments with your creditors, ideally freezing interest and charges (though creditors are not obliged to agree).
It is informal, so you can change or leave it, but it is not legally binding on creditors and does not write off what you owe.
How could this affect me?
A DMP can make debts manageable and stop them spiralling, but paying less than the contractual amount is usually recorded on your credit file and can show as arrears or defaults for six years.
It only covers non-priority debts — priority debts like your mortgage, rent, council tax and energy must still be dealt with separately and first.
Things to watch out for
- Never pay a fee-charging firm for something charities do for free.
- Creditors do not have to freeze interest or accept reduced payments.
- Reduced payments are usually marked on your credit file for up to six years.
Know your rights
- You can get a DMP set up and managed free of charge by not-for-profit services such as StepChange, Citizens Advice and National Debtline.
- Under FCA rules, lenders must treat customers in financial difficulty fairly and consider reasonable repayment arrangements.
- You can complain and escalate to the Financial Ombudsman Service if a lender treats you unfairly.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- MoneyHelper, Debt management plans (opens in a new tab). Accessed 22 Aug 2026.
- StepChange, Debt management plan (DMP) (opens in a new tab). Accessed 22 Aug 2026.