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This solution is available throughout the UK.


How is my DMP payment worked out?

After we've put together your household budget we'll look at your contractual payment figures. We'll then work out whether you can afford to pay your creditors and if you can't afford to pay them, how much we'll offer each of them on a DMP.

Your DMP payment is worked out by what you have left over as surplus income, after your living expenses are accounted for. As a DMP client we also take the contractual payments on your debts into account. Doing this helps us work out whether you need a debt solution in the first place and if you do, which one is best for you.

How we work out what each creditor gets

We work out how much to pay each of your creditors based on the contractual payment you originally had arranged with them. By doing this, we can ensure that none of your creditors are treated better or differently to another.

We work out the payments this way because:

  • The original term of a debt is reflected in how long it takes to repay it on your DMP so a debt with a 5 year term will be repaid before a debt with a 10 year term
  • Your creditors will be repaid one by one so you’ll see the progress you’re making and your debt total reducing

For example, if your contractual payments total £100 per month, a debt with a £30 monthly contractual payment will get 30% of your DMP payment.

Let’s take a look at how that affects the different types of debts you may be dealing with:

We calculate your payment based on 5% of your balance. This is an estimate of the amount you need to pay to cover your minimum payment plus extra to pay the debt off in a reasonable time.

For example, if you owe £3,500 on your store card we’ll put your contractual payment as £175.

The minimum payment on your store card, catalogue or overdraft might be different to this but we use 5% to make sure that all your catalogues, store cards and overdrafts are treated in the same way.

We use 5% as this is the average amount for contractual payments on overdrafts, store cards and catalogues across the industry. 

The contractual payment for these debts is 3% of your balance. This is an estimate of the amount you'd need to pay to cover your minimum payment plus extra to pay the debt off in a reasonable time.

For example, if you owe £6,250 on your credit card we’ll record your contractual payment as £188 (3% would be £187.50 but we round up to the nearest pound).

Your minimum payments might be lower than this but by using this 3% we know that all of your credit cards are being treated the same.

We use 3% as this is the average amount for contractual payments on credit cards across the industry. 

If you’ve got a payday loan the contractual payment will be the same as your outstanding balance.

For example if your payday loan balance is £450, your contractual payment will be £450.

This doesn’t mean that your payday loan will be treated as a priority; it just means we get an accurate picture of your situation and whether you can afford the payments you’re being asked for. Once you’re on a DMP the payment your payday loan receives will be based on 5% of the balance so they aren't treated any differently than your other creditors.

If you’ve got a personal loan or any other type of unsecured debt your contractual payment will be the amount you agreed to pay back each month.

For example, if you took a loan out for £10,000 and you agreed to pay back £200 a month when you took the loan out your contractual payment will be £200.

If your contractual payment varies we'll use an average of the different payments you've been asked to make. If you aren't sure what your contractual 

As the smaller debts are repaid, more money will go your remaining debts

The minimum amount we pay to a creditor is £5, so that no one gets a really small payment.

Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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*This is the average rating of our service based on the StepChange reviews on Feefo by DMP and DRO clients three months into their solution.

© StepChange Debt Charity 2019