Debt management plans: How to set up a DMP

A debt management plan (DMP) is a debt solution that helps you pay back debts at an affordable rate. You need to fill in some forms to set it up.

This page explains the steps you need to take to set up a debt management plan.

How do I set up a DMP?

Get debt advice from a debt charity or debt management company before you choose a debt solution.

Your provider will let you know if a DMP is right for you.

They need some paperwork to set up your DMP, including:

• A signed DMP agreement
  
  • This authorises the DMP company to make payments on your behalf
• A signed Direct Debit agreement
  
  • To make payments
• Proof of income
  
  • To check you can afford payments
• Account numbers for all of your debts
  
  • To work out who you owe money to

This process is simple and can be done online.

Your provider works out:

• Who you owe money to
• How much you owe
• What you can afford to pay
• How much you should pay each person you owe

A DMP can affect you in several ways. Read about the benefits and risks before entering into a DMP.

What happens after the DMP is set up?

You start making regular payments towards your debts once your DMP is set up.

It is normal to still get letters from creditors but you can expect less contact if you stick to the payments.

How long does a DMP take to set up?

It can take a few weeks to set up a DMP.

It depends on how quickly you can provide the information needed.

Can I move my DMP from another company?

Yes, you should be able to move your DMP.

Use a fee-free DMP company to make sure all your money goes towards paying your debts.

Your new provider will:

• Look at your finances
• Suggest another solution if they do not think a DMP is right for you

Can I set up a DMP myself?

You can set up your DMP yourself. But, you have to:

• Manage your own payments
• Contact everyone you owe yourself
• Manage the DMP yourself

Some debt management companies charge for DMPs.

StepChange is a charity and provides free debt management plans.

• All of the money paid into your DMP goes to the people you owe
• This means you pay off your debt faster

Find out more about how debt management companies work.

You may be able to apply for Breathing Space while you set up your DMP.

This helps people during debt advice.