What is a debt management plan? A Debt Management Plan (DMP) enables individuals to pay personal unsecured debts which are not being managed as they are late and taking too large a portion of income or even exceeding it. Debt management involves recording all the debts, assessing monthly income and expenditure and re-negotiating interest rates and payments with the existing creditors. Due to the debtors more realistic monthly repayment schedule the lender will receive a better return.

A good debt advice service will only suggest a debtor pays what they can realistically afford after their priority costs such as their mortgage ,utilities ,food etc. Creditors will want to review the debtor’s situation annually to ensure they are paying as much as they can reasonably afford. A Debt Management Plan is recognised as a workable debt solution.