A DMP is a way of effectively consolidating payments to multiple creditors into one, manageable and affordable
monthly amount. The amount paid will vary from case to case, but the important thing to remember is that it will
be based on individual circumstances and will never be more than the individual can reasonably afford.
Setting up a DMP
While an individual can put forward a DMP proposal to their creditors, many prefer to opt for a debt management
company to manage the DMP on their behalf. They will request all financial information from the debtor to
calculate what can be reasonably afforded on a monthly basis. They will speak to the creditors on behalf of the
individual, and once agreed, they will collect the monthly payment and be responsible for paying the correct
amount to each of the creditors involved.
Debt Management Company fees
• Charitable or non fee paying organisations - There are many debt management companies available. Some
are charitable organisations or are a non fee charging service, such as the Consumer Credit Counselling
Service (CCCS). These companies will be able to advise on the options available as well as assist in setting
up the DMP. As they do not charge a fee, they are very popular and often have very high case loads resulting
in delays and lengthy set up times. Furthermore, there is unlikely to be a dedicated contact within the
• Fee Charging Organisations - The majority of companies providing Debt Management Services will charge a
fee. They will usually offer a free consultation to establish the best action to take, and if their services
are required, a fee will then be charged. There are no obligations after a free consultation and it is often
advisable to shop around to get the best deal. The fee itself will be comprised of an ongoing fee usually
around 15-20% of the monthly amount and will be taken before the creditors are paid. There is often an
initial administration fee, and this maybe 100% of the first 1, 2 or even 3 months repayment. While it may
seem a lot, Debt Management Companies are specialised in their field and could be able to agree a better rate
with creditors, therefore the fee could actually be worthwhile, especially as there will be always someone to
talk to in the event of an issue.
It is always worthwhile shopping around to establish the best option. Debt management companies do need to
have a consumer credit licence and may have their code of conducts approved by the Office of Fair Training
(OFT). It is also worth checking online to see if there is any feedback from others that have used the
services. Testimonials can save a lot time and effort later on.