Manage your debts with our fee-free DMPs. Pay them off at an affordable rate with reduced monthly payments.
Is a DMP right for me?
DMPs are available throughout the UK.
A debt management plan(DMP) helps you to manage your debts and pay them off at a more affordable rate by making reducedmonthly payments. DMPs from StepChange Debt Charity are fee-free.
We'll work with you to establish a budget that meets your household's needs. If a DMP's right for you we’ll help you set up and manage it, at no cost to you.
Many debt management companies provide DMPs, but most charge a fee.Our DMPs have no set-up charges or monthly fees.
Benefits of a DMP
- Our DMPs are fee-free - most companies charge a fee for their DMPs
- You’ll only pay what you can afford to your creditors after we've put together a monthly household budget
- If you’ve fallen behind with your household bills you can add the arrears toyour DMP to help get your accountsback up to date. You'll still need to make your regular ongoing monthly payments.
- You'll make one monthly payment to us and we'll manage the payments to your creditors for you
- We’ll review your DMP regularly to make sure you’re paying what you can afford
Risks of a DMP
- Some of your creditors may still contact you
- Most creditors will agree to reduce or stop interest and charges, but they don’t have to
- If creditors continue adding interest and charges, this could increase the total amount you currently owe
- Your creditors don’t have to agree to your reduced payments, but we’ll still send your payments anyway
- Your creditors may still take further court action against you, such as a County Court judgment (CCJ)
- Reduced payments may lead to a longer arrangement term and couldhavea negative impact on your credit file
How we helped Julia
Julia, Devonshire: "I wished I had asked for help before. I got in to so much debt, and was ill with stress. StepChange made me feel so comfortable."
Get help like Julia did >
How to apply for a DMP
Find out if a DMP is the right debt solution for you. Use our online tool to get debt help or speak to one of our expert advisors.
If we recommend a DMP we’ll give you a 'personal action plan' with information about getting it set up and support you during this process.
Once we have the allinformation we need, we'll contact your creditors and you start making payments to them through your DMP.
Frequently asked DMP questions
You should always get free and impartial advice before going ahead with a debt solution. To find out which option is best for your circumstances, we’ll ask you a series of questions during a debt advice session, including:
- How much money you owe and who do you owe money to
- What types of debts you have
- How much you can pay towards your debts
- Whether your circumstances could improve in the future
We wouldn’t recommend a debt management plan to you if you’d struggle to make payments towards your debts, or if you were unable to pay them back within a reasonable amount of time.
Ready to find out if a debt management plan is right for you?
Firstly, have a debt advice session online or over the phone. If we think a debt management plan is suitable for you, we’ll recommend it. at the end of your advice session. You’ll then get a personal action plan with a step-by-step guide to apply for one.
We’ll confirm the information you’ve provided is correct and work out the single monthly payment you’ll make to us to share among your creditors.
To allow us to manage your payments you’ll need to send us a signed agreement and Direct Debit form.
Ready to get started?
A debt management plan will almost always affect your credit file and credit score. This is because you usually pay less than the minimum repayment amount you agreed to when you initially took the debts out.
A DMP isn’t specifically registered on your credit file but the reduced payments could impact on a few different areas of your credit file. Details of court action, defaults or missed payments will be removed six years from the date it happened, even if the debt hasn’t been fully repaid.
Read more about how a DMP affects your credit score here.
If you've fallen behind with your priority household bills (such as your utility bills, rent or mortgage) and built up arrears then we can add these onto your DMP and include them in your monthly DMP payment.
If you add these arrears onto your DMP we'll help you clear them as quickly as possible. Once your arrears start to clear the amount that's being paid towards your unsecured debts will increase.
This makes repaying your arrears easy and stress free as it's all included in the single monthly payment you make to us. All you need to do is make sure you continue to make the normal monthly payment towards your priority household bills. Learn more about how to get a DMP.
Yes, you can. If you already have a DMP some of your monthly payment may be going as fees to your debt management company. Switching to a free StepChange DMP means that all of your monthly payment goes towards repaying your debt – so you could repay them more quickly.
Severaldebt management firms have closed due to not meeting the required standards set by the Financial Conduct Authority (FCA). If you’ve been affected by these closures, you can switch as well.
The first step to switching your DMP is for us to learn more about your debts and your household budget so that we can recommend the right debt solution for you.
Debt consolidation involves taking out a loan to repay all unsecured debts you may have. Usually the loan would be paid back over a longer period than the debts it was taken out to repay, therefore lowering the monthly payments. However, interest is usually charged.
A debt management plan doesn't involve taking further credit. Instead, new payment terms are agreed with your creditors, based on what you can afford to pay. Use our free, confidential online debt advice toolto see if a DMP is your best option.
Read our DMP guides
It's important you're fully informed about how debt management planswork and how they can affect you before you go ahead with this solution. Our DMP guide section has practical advice about the whole process: from applying to what happens after your DMP ends.
Debt management plan guides
- How do DMPs work?
- DMP Frequently asked questions
- DMP or bankruptcy?
- DAS or debt management plan?
- Free debt management plans
- Setting up a DMP
- DMPs and credit scores
- DMPS and your home
- Buying a car on a DMP
- Can I go on holiday on a DMP?
- Creditor contact on a DMP
- Paying off DMPs early
- DMP Do's and Dont's
- How can my DMP fail?
- Redundancy and DMPs
- Saving money on a DMP
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FAQs
What is a DMP fee? ›
Debt management program fees provide the money needed to operate the nonprofit credit counseling agencies that provide this service to consumers.
Is StepChange a good idea? ›Is StepChange a good idea? Step Change is a fantastic idea for lots of debtors. They provide free help and will even speak to your creditors on your behalf. And because many of their debt solutions are fee-free, you could save money by choosing Step Change.
Is it worth getting a DMP? ›A DMP may be a good option if the following apply to you: you can afford the monthly repayments on your priority debts (such as mortgage, rent and council tax) and your living costs, but are struggling to keep up with your credit cards and loans.
Does StepChange charge fees? ›DMPs from StepChange Debt Charity are fee-free. We'll work with you to establish a budget that meets your household's needs. If a DMP's right for you we'll help you set up and manage it, at no cost to you.
Can I still use my credit card if I have a DMP? ›You're required to close your accounts
Any credit card that is included in your DMP is required to be closed.
How long does a DMP stay on a credit file? Details of court action, defaults, partial payments and missed payments are recorded for six years. They are removed six years from the date it happened, even if the debt hasn't been fully repaid. When your DMP ends you can improve your credit score by using credit sensibly.
What is the best debt management company? ›- Best Overall: National Debt Relief.
- Best for Debt Settlement: Accredited Debt Relief.
- Best for Customer Satisfaction: New Era Debt Solutions.
- Best Interactive Program: Freedom Debt Relief.
- Best for Tax Debt Relief: CuraDebt.
- Best for High-Interest Credit Card Debt: DMB Financial.
Getting a DMP will usually lower your credit score. This is because you'll be paying less than the originally agreed amount, which will be shown on your credit report. Reduced payments show you're having difficulty repaying what you owe, so lenders may see you as high-risk.
Does DMP affect credit score? ›If you're in a debt management plan (DMP), it may have an impact on your credit rating. This could mean you find it more difficult to get credit in the future.
Do most creditors accept DMP? ›Sometimes a creditor will refuse to deal with a DMP provider. This could be because the creditor doesn't want to accept the reduced payments or sometimes it could be because they've objected to you using a fee-charging provider, which would mean there's less money to pay the debts you have with them.
Can I do my own DMP? ›
You can arrange a plan with your creditors yourself or through a licensed debt management company for a fee. If you arrange this with a company: you make regular payments to the company. the company shares the money out between your creditors.
How long does it take to set up a DMP? ›The time taken to set up a Debt Management Plan varies between different debtors, but on average it takes 2-3 weeks to set up the DMP once you have given your DMP provider all the information they need.
How does StepChange work? ›You send us a Direct Debit payment each month and we do the rest, paying your creditors according to the plan. You don't have to worry about contacting your creditors to reduce your payments because we do it for you. We're always on hand to help you or give you any further information.
Can I cancel my DMP StepChange? ›You can stop your DMP at any time, and you don't have to make a legal commitment when starting a DMP. You usually need to sign a DMP agreement form. This gives the DMP provider permission to contact your creditors on your behalf. However, the agreement's not legally binding.
How does StepChange make money? ›How we're funded. We're only able to do what we do because we're funded almost entirely by voluntary donations from creditors, which include banks, the government and loan companies. With their financial support, our highly trained advisors provide free and impartial debt advice to thousands of people every week.
Can a DMP last 10 years? ›How long can a DMP last for? With a debt management plan (DMP) you pay back your debts at an affordable rate, over a reasonable period of time, usually no more than 10 years, although this could be longer, depending on your circumstance. Find out more about getting a debt management plan.
Can you get a mortgage while on a DMP? ›Many borrowers assume that a mortgage with a DMP isn't possible but would be wrong to do so. It's certainly possible to get a mortgage with a debt management plan, whether your DMP is active or complete. Getting a mortgage with a completed DMP is easier in comparison to an active DMP.
How can I pay off DMP faster? ›As debt management plans (DMP) are quite flexible, you may find that you're able to pay off a DMP early by increasing monthly payments or paying a lump sum. Your DMP payment is worked out once your priority household bills, arrears and other living costs have been accounted for in your personal budget.
What is the minimum debt level for a DMP? ›This is because if you owe less than this, it will usually make more sense to agree a payment plan with your creditors yourself. There is no minimum debt requirement for a DMP.
Can you go on holiday on a DMP? ›It's not 'against the rules' to go on holiday during your debt management plan (DMP). However, there's likely to be a limit on the kind of holiday you can afford while paying off your debts. Your monthly debt management plan payments are a reflection of what you can offer towards your debts at the moment.
Can I open a new bank account while on a DMP? ›
Should you open a new bank account if starting a debt management plan? You can definitely have a bank account if you start a debt management plan (DMP). You will need an account for your income to be paid into each month. In addition you will normally need to set up a regular payment into the Plan.
Who is the best person to talk to about debt? ›A credit counselor can help you develop a debt management plan for some or all of your debts. You may make one payment to the credit counseling organization each month or pay period to use toward payments to your creditors, which may help you focus on your other financial goals.
What is the best loan to pay off debt? ›Using a personal loan to pay off debt helps you get rid of multiple payments and go down to one payment per month — and hopefully with a much lower APR. Consider using a debt repayment calculator to determine how much sooner you could pay off your debt with a lower interest rate.
Which type of debt fund is best? ›Short-term debt funds may be best suited for those with low to moderate risk appetites. These funds perform best when the interest rates are high. If you have money to invest from 9 to 12 months and have a low-to-moderate risk appetite, short-term funds can be a great investment option.
What are 3 things that a debt collection agency Cannot do? ›- Threaten you with violence or harm.
- Use obscene or profane language.
- Call you repeatedly.
- Call you before 8:00 a.m. or after 9:00 p.m. without your permission.
- Call you at work, if you forbid it in writing.
Disadvantages of debt management plan
The arrangements are informal. Your creditors can change their mind at any time. Your credit rating may still be harmed. While such arrangements reduce your monthly repayments to make them affordable it usually means you will pay more in total over a much longer period.
Make sure all of your debts are included in the DMP, even if you think you can manage that catalogue payment or want to keep your overdraft 'for emergencies'. Sometimes you might have missed a debt from your plan, so be sure to let your DMP provider know about any changes as soon as possible.
Do Stepchange need bank statements? ›Your proof of income needs to include your full name, and can be one of the following: Your most recent payslip (dated within the last three months) A recent bank statement that shows income you've received (dated within the last three months).
Will a DMP affect my job? ›Less formal solutions such as a debt management plan shouldn't have any effect on your employment. It's still best to check however as debt management plans are based on paying lower than the minimum amount, and will affect your credit rating.
How do you qualify for DMP? ›There are no such eligibility criteria for a DMP since a DMP is an informal agreement between you and your creditors. That being said, it's important for you to be aware of the fact that it's up to your creditors whether or not your DMP is going to be approved or not.
Who owns StepChange? ›
...
StepChange.
| Founded | 1993 |
|---|---|
| Founder | Vic Ware, Malcolm Hurlston |
| Area served | United Kingdom |
| Services | Debt advice and support |
| Employees | 1,350 |
Once we've processed your information we'll contact each of your creditors and: Tell them you're coming onto a DMP with us. Give them a copy of your budget so they know you're paying as much as you can afford. Let them know when they'll get the first payment from us.
Who runs StepChange? ›Phil Andrew
Phil has over 30 years' varied experience as Chair, CEO, CFO, NED and Treasurer in government owned organisations, blue-chip companies and charities in the UK, Ireland, Russia, France and the Far East. Phil is a Chartered Accountant, qualified treasurer and Chartered Marketer.
A data management platform (DMP) is a unifying platform to collect, organize and activate first-, second- and third-party audience data from any source, including online, offline, mobile, and beyond. It is the backbone of data-driven marketing and allows businesses to gain unique insights into their customers.
What is a DMP in credit counseling? ›A debt management plan (DMP) is a structured debt repayment program that doesn't require a loan and is typically administered by a nonprofit credit counseling agency. MMI works closely with creditors to reduce your interest rates and find a monthly payment that fits your budget.
What is DMP in accounting? ›What Is a Debt Management Plan (DMP)? A debt management plan (DMP) can help you pay off unsecured debts faster. They're offered by non-profit credit counseling companies who negotiate with your creditors to secure concessions, like reduced interest rates and waived fees.
Can DMP affect renting? ›Will a DMP affect my home if I rent it? A DMP won't affect your current tenancy as long as you keep your rent payments up to date, and you pay off any rent arrears at an amount your landlord agrees. If you have rent arrears, these are a priority payment.