Debt Management Plan (DMP)

Fees and disadvantages may apply if you enter a debt help solution. May not be suitable for all. Solutions apply to unsecured debt only

What is a Debt Management Plan?

A Debt Management Plan (DMP) is an informal arrangement that allows you to make one affordable monthly payment towards certain unsecured debts.

The payment is based on what you can reasonably afford after taking account of your essential household expenditure.

A DMP is not legally binding. Your creditors do not have to agree to the arrangement and can choose whether to freeze interest and charges.

At Mums with Debt, we can explain how a DMP works and consider it alongside other debt solutions when discussing your circumstances.

United Insolvency Ltd, trading as Mums with Debt, does not provide or administer Debt Management Plans. If a DMP appears appropriate for your circumstances, we can explain the next steps and where you can obtain further help.

Is a Debt Management Plan right for me?

If you’re struggling to make your monthly payments but have a stable enough income to make consistent, smaller repayments over an extended period, then a DMP could be right for you.

When should I consider a DMP?

A DMP could be right for you if you are:

✅ Worrying about money

✅ Struggling to pay your household bills

✅ Concerned about creditor contact

✅ Relying on overdraft's or credit cards

✅ Missing repayments or getting into arrears

Debt Management Plan pros & cons

DMP Pros

✅ Reduced monthly payments

✅ Creditors may freeze interest & charges

✅ DMP's are not recorded on public registers

✅ You should recieve reduced contact from your creditors

DMP Cons

❌ You are still liable for your full debt

❌ Creditors can still take legal action

❌ No guarantee creditors will accept

❌ Can affect credit file

How to apply for a DMP

Mums with Debt does not set up or administer Debt Management Plans.

When you contact us, we will gather information about your financial circumstances and explain the debt solutions that may be relevant to you.

If a DMP appears to be an appropriate option, we will explain this to you and provide information about the next steps and where you can obtain appropriate DMP assistance.

We will not represent that a DMP is suitable for you until sufficient information about your circumstances has been considered.

What debts does a DMP cover?

A DMP covers most unsecured debts, which means debts that are not tied to assets (usually your home). These can include:

• Household bills
• Council tax
• Credit cards
• Personal loans
• Overdrafts
• Payday loans
• Buy now, pay later debts

What debts can’t be included in a DMP?

An DMP typically includes most unsecured debts. Any debts that are tied to assets, like your house, will not be covered in an DMP.

• Mortgages
• Debts incurred through fines
• Student loans
• Court fines
• Social fund fines
• Hire purchase agreements
• Child support arrears

Living with a Debt Management Plan

Debt Management Plans get to work almost immediately helping you manage your debt, meaning that once you have considered your budget, you can begin making your new manageable payments right away.

It’s worth noting that creditors can still contact you and may continue to request payments. If your plan is managed by Mums with Debt, you can refer any creditor contact to us, and you won’t need to reply. If payments are not made to creditors (in whole or in part) you can still fall into arrears or have increasing arrears.

It’s also important to remember that a Debt Management Plan will impact your credit score for the time the plan is in place, and 6 years after that.