[Alt text]

A DMP is an informal agreement between you and your creditors for paying back your non-priority debts.

You pay back the debt by one set monthly payment, which is divided between your creditors.

Most DMPs are managed by a provider who deals with your creditors on your behalf, so you don’t have to.

A DMP is not legally binding, meaning you’re not tied in for a minimum period and you can cancel it at any time.

If you miss payments on a credit agreement, this will be recorded on your credit reference file by your creditor, whether or not you set up a DMP.

This will usually make it harder for you to get credit.

Creditors do not have to agree to freeze interest under a DMP.

The debt management company will have to persuade each creditor that it makes sense for them to freeze interest and charges, to avoid the debt increasing.

Some debt management providers might charge a fee, however there are several charities who will provide this service for free.

These include National Debtline, Step Change and Payplan.