2. Debt Management Plans

A Debt Management Plan is an agreement between you and your creditors to pay all of your debts.

Debt management plans are usually used when either:

  • you can only afford to pay creditors a small amount each month
  • you have debt problems but will be able to make repayments in a few months

You can arrange a plan with your creditors yourself or through a 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

The Money Advice Service has information on organisations that can give you free advice about whether a Debt Management Plan is right for you.

Get a Debt Management Plan

  1. Set up a plan with a debt management company authorised by the Financial Conduct Authority (FCA). Find an authorised company.

  2. The company works out your monthly payments. You’ll have to give details about your financial situation, eg your assets, debts, income and creditors.

  3. The company contacts your creditors and asks them to agree to the plan (they don’t have to).

Unless stated in the agreement, your creditors can still:

  • ask you to pay your full debt at a later date
  • take action to recover their money even if you keep up your payments


Some companies will charge:

  • a set up fee
  • a handling fee each time you make a payment

Make sure you understand the costs of your plan and how you pay for it.


Debt Management Plans can only be used to pay ‘unsecured’ debts, eg debts that haven’t been guaranteed against your property.

Your responsibilities

Your plan can be cancelled if you don’t keep up your repayments.