How do I start a Debt Management Plan (DMP)?

Summary: How do I start a DMP? - This article looks at the practicalities of starting a Debt Management Plan (DMP) and the options open to you.

DIY plans

It is possible to make some arrangement with creditors directly in order to repay your debt, but generally DMP's refer to managed plans by companies that specialise in debt solutions. It's never a bad idea to contact your creditors and see if they can offer help, but responses may vary considerably from creditor to creditor.

Free advice

Most DMP companies offer free advice to those who call in or request a call back. It's wise to listen to more than one company and not be pushed into making a decision of you're not ready to do so. You will need time to understand and consider the plan that a company may be suggesting. Repayment levels, quality of service, availability, and regular updates are all important before making a decision.

Free DMP's

Several s-called charitable companies may be willing to administer a plan for you. These include Stepchange and Payplan. They will pass on your payment to the creditors without holding back any of it to cover their costs. They are funded primarily by the creditors. As long as creditors freeze the interest on the debts, then these companies will enable you to repay the debt quicker. However they are busy and according to some people customer care, availability, flexibility can be less than clients had hoped for.

Fee-charging companies

These companies will act on your behalf and will in all probability charge a set up fee (often the first 2 months payments into the plan) and a management fee (typically 15-20% of the monthly payment) to administer the plan. DMP companies do vary significantly in the level of service they offer. It is certainly worth finding out about different companies (; and if possible look for other peoples experience via forums. If the service offered allows for a greater chance of interest being stopped, a greater sense of availability, perhaps your own debt advisor - then paying a fee may make sense.

The above is provided as information only. does not provide debt advice. You must always seek professional advice before taking any action to resolve your debts.