A DMP is typically suited to people who have a regular income but are finding it difficult to meet minimum monthly payments across multiple debts. It works best for unsecured debts and is generally considered when debts are manageable enough not to require a more formal insolvency solution like an IVA or bankruptcy.

The length of a DMP depends on the total amount owed and what you can realistically afford to repay each month. Most plans last between one and ten years, though some people complete theirs sooner if their financial situation improves or they receive a lump sum to settle debts early.

Yes. A DMP will typically have a negative impact on your credit score, as you are repaying debts at a reduced rate rather than meeting the original agreed terms. This information stays on your credit file for six years. However, for many people, the improvement in financial stability outweighs the short-term impact on their credit rating.

It is strongly recommended that you open a new bank account before your DMP begins. If you bank with an institution you also owe money to — such as an overdraft or credit card with the same bank — they have the legal right to use funds in your current account to offset what you owe them. This is known as the right of set-off, and it can leave you without money for essential living costs.

You’ll want an account with no overdraft facility, no credit products attached, and no links to any of your existing creditors. Ideally it should support direct debits and standing orders so you can manage your regular bills and DMP payments smoothly. Accounts that don’t require a credit check are also worth looking for, as your credit score is likely to be affected during a DMP.

Yes. A number of providers offer accounts specifically designed for people with poor credit histories. These are sometimes called basic bank accounts bank account alternatives like Suits Me. They typically don’t run credit checks, so your DMP or credit score won’t prevent you from being accepted.

No. Switching to a new bank account does not interfere with your DMP itself. Your DMP provider will continue to manage your repayments as agreed. You will simply need to update your employer with your new account details for wages, and update any direct debits or standing orders to your new account.

A DMP is an informal agreement, so creditors are not legally obliged to freeze interest or stop contacting you. However, many creditors will agree to do so once a plan is in place. A reputable DMP provider will negotiate on your behalf to try to get interest and charges suspended.

Free DMP providers such as StepChange and Citizens Advice offer the same service as paid providers at no cost to you. Using a free provider means more of your money goes towards repaying your debts rather than fees. It is generally recommended to use a free, FCA-regulated provider.