Debt Management Plan

Sometimes known as a DMP, find out more information here

A Debt Management Plan (DMP) allows you to pay off your unsecured debt at a rate that is affordable to you.   The amount you pay back each month is worked out after taking into consideration all your monthly outgoings including all priority costs.  Please refer to our other information heading below to best understand what debts can and cannot be in included and also what priority bills are.    A DMP may be suitable when you cannot afford your contractual payments to your creditors.  Once a payment is made to Debt Correct, we will forward your pro rata payment to your creditors within 5 working business days.   Debt Correct does not charge any cancellation fees if you wish to terminate the plan at any time.  For full conditions please refer to our T&C’s.

Please find below an outline of the Risks/ Disadvantages, Costs and Advantages of entering into a Debt Management Plan (DMP):



Please find below an example of the cost of a typical plan:

Total Debt included in the plan   Agreed monthly disposable income.  Debt Correct management fee

           £4372.86                                                     £121.00                                                    £39.00

£4,372.86 divided by £82 (121 – 39) = 54 months (4 years, 6 months)

Total Cost 54 months x £121 = £6,534.00 (This includes fees of £2,106.00)

Please understand the above figures are based on an estimate.  This is due to factors both within Debt Corrects control and not.  Debt Correct may choose to higher or lower its fee’s at any time.  Creditors may or may not reduce or stop interest.  



DMP’s are flexible and payment can be both lowered and raised (following a full financial review).

One affordable monthly payment

This is a private arrangement between you and your creditors and will not show up on any public registers (this is particularly useful to certain professions were other solution are not suitable)

You are not tied into a contract; This is an informal arrangement.



As you are making lower payments to creditors this could mean it takes longer to clear your debts

Your creditors may still contact you and some creditor may still issue default notices.

As you are not making the full payment to your creditors this may have a negative effect on your credit rating and may affect your ability to borrow money in the future.  This could last up to 6 years after all debts are cleared or from when you start to meet your contractual creditor obligations.

Your creditors may continue to contact you

Most creditors if they accept the plan will agree to lower or stop interest being added to you account(s).  However there is no guarantee that this will happen and this may result in your balances rising.  Creditors may also continue with any current or potential recovery action.



It is important to keep up any repayments on what are considered priority bills.  An example of which would be your gas or electricity bill.  If you stopped paying them you could find yourself without these services. 

Please find below a list of priority bills:

Mortgage or Secured loan(s)            Rent                                        Council Tax             Child Maintenance

Magistrates Court fines                     TV Licence                              Gas                           Electric 

County Court Judgements                 Water rates                           Telephone              County Court Judgements


Please find below a list of debts/commitments that can and cannot be included in a DMP


Can be included:

Unsecured Loans     Credit Cards    Store Cards     Overdrafts   Catalogues

 Arrears not attached to current property or provider.


Cannot be included:

Secured loans           Hire Purchase (HP)    Current Utilities providers   Child Maintenance 

Guarantor loans       TAX or VAT arrears    CCJ’s                                         Student loans

TV License arrears    Court fines                  Social fund loans                    Mortgage arrears

Rent arrears.

Please note, it is possible for you to get free debt advice from a charitable organisation. Using free agencies could result in you being debt free sooner.