--- title: "Debt Management Plans: the free alternative to IVAs | CrisisCompass Blog | CrisisCompass" source_url: "https://crisiscompass.co.uk/blog/debt-management-plan-guide" retrieved_by: "AnswerRail Edge Engine v1.1.0-parity-v20 (https://answerrail.com)" level_of_detail: "standard" token_payload_reduction: "91.9%" raw_html_bytes: 108434 compiled_body_bytes: 8749 entities_extracted: 5 currency_recall_static_html: "100%" monitored_currency_tokens: 26 link_recall_static_html: "100%" monitored_content_links: 14 omitted_dynamic_states: ["non_default_tab_panels", "volume_slider_tiers"] conversion_notes: "Origin renders alternate tabs and volume pricing sliders via client-side JavaScript; serving default static AST state." rfc_compliance: "RFC 9110" last_verified_at: "2026-10-25T08:51:28.857Z" cache_age_seconds: 0 origin_cache_control: "public, max-age=0, must-revalidate" --- > **Canonical Source:** [https://crisiscompass.co.uk/blog/debt-management-plan-guide](https://crisiscompass.co.uk/blog/debt-management-plan-guide) > > *A DMP lets you make one affordable monthly payment to all your creditors. Here's how to get one for free (and avoid the fee-charging companies).* ### Organization: CrisisCompass | Field | Value | | :--- | :--- | | **Organization** | CrisisCompass | | **Official Website** | https://crisiscompass.co.uk | | **Overview** | Independent UK crisis management, financial support guidance, and emergency contingency portal. | ### Entity: CrisisCompass | Property | Detail | | :--- | :--- | | **Type** | WebSite | | **Name** | CrisisCompass | ### Frequently Asked Questions (FAQ) **Q: Is CrisisCompass free?** > A: Yes. All core tools — Survival Check, Benefits Finder, Hardship Letter Generator, Budget Calculator, Debt Priority Checker, and AI Chat — are completely free. Optional premium PDF documents start from £2.99. **Q: Is CrisisCompass financial advice?** > A: No. CrisisCompass provides general information and tools. For personalised financial advice, we recommend contacting StepChange (0800 138 1111) or Citizens Advice (0800 144 8848). **Q: Is my data safe?** > A: We store data locally in your browser wherever possible. The Financial Survival Check results are never saved to our servers. See our Privacy Policy for full details. Debt Solutions # Debt Management Plans: the free alternative to IVAs 19 May 2026 · 3 min read Share: A Debt Management Plan (DMP) is an informal agreement to pay your debts at a rate you can afford. Unlike an IVA or DRO, it's not legally binding — but it's flexible and can be set up for free. ## How does a DMP work? 1\. A DMP provider reviews your income and expenses 2\. They calculate what you can \*\*realistically afford\*\* to pay each month 3\. They contact your creditors to propose reduced payments 4\. You make \*\*one monthly payment\*\* to the DMP provider 5\. They distribute it among your creditors ## Free vs paid DMP providers This is the most important distinction. \*\*Never pay for a DMP\*\* when free providers exist. ### Free providers (recommended): - \*\*StepChange\*\*: 0800 138 1111 — the largest free DMP provider - \*\*PayPlan\*\*: 0800 280 2816 - \*\*National Debtline\*\*: 0808 808 4000 (advice) ### Fee-charging companies (avoid): Some companies charge \*\*setup fees\*\* and \*\*monthly management fees\*\* — meaning less of your money goes to paying off debt. They often advertise heavily. \*\*Avoid them.\*\* ## What debts can a DMP include? \*\*Included:\*\* - Credit cards and store cards - Personal loans and overdrafts - Catalogue debts - Payday loans \*\*Not included:\*\* - Mortgage or rent arrears - Council tax - TV licence - Court fines - Child maintenance - Student loans Priority debts should be dealt with separately, before setting up a DMP. ## The pros - \*\*Free to set up\*\* through reputable providers - \*\*Flexible\*\* — your payments can change if your circumstances do - \*\*No formal insolvency\*\* — doesn't appear on the insolvency register - \*\*Single monthly payment\*\* — simpler to manage - \*\*Creditors often freeze interest\*\* — meaning more of your payment reduces the debt ## The cons - \*\*Not legally binding\*\* — creditors aren't obligated to accept - \*\*Debts take longer to clear\*\* — reduced payments mean a longer timeline - \*\*Credit rating affected\*\* — missed or reduced payments are recorded - \*\*Some creditors may not cooperate\*\* — though most do when approached by a reputable provider - \*\*Interest may still be charged\*\* — if creditors don't agree to freeze it ## DMP vs other options | Feature | DMP | IVA | DRO | Bankruptcy | |---------|-----|-----|-----|-----------| | Legally binding | No | Yes | Yes | Yes | | Duration | Until paid | 5-6 years | 12 months | 12 months | | Debt written off | No (usually) | Yes (remainder) | Yes (all) | Yes (most) | | Cost | Free | Fees from payments | £90 | £680 | | Flexibility | High | Low | None | None | | Suitable for | Any amount | £6,000+ | Under £30,000 | Any amount | ## Getting started 1\. \*\*Call StepChange\*\* on 0800 138 1111 (free, confidential) 2\. They'll review your full financial situation 3\. If a DMP is right for you, they'll set it up for free 4\. If a different solution is better (IVA, DRO, etc.), they'll explain the options The key message: \*\*get free advice first\*\*, and never pay for debt management you can get for free. ## Free tools mentioned in this article [Financial Survival Check](/check)[Hardship Letter Generator](/tools/letters)[Benefits Finder](/benefits)[Budget Calculator](/tools/budget) 🏢 UK Limited Company Director Triage • Finance Act 2009 s.108 & ERA 1996 s.166PAYE • VAT • Corporation Tax • Bounce Back Loans ## Running a Limited Company with HMRC Arrears or Business Debt? Calculate your monthly **HMRC Time-to-Pay (TTP)** instalment and check if you qualify for a tax-free **Company Director Statutory Redundancy & Notice Payout** from the government's National Insurance Fund (Employment Rights Act 1996 s.166) if your company ceases trading. HMRC / Company Debt£28,000 £3,000£30k Express Line£150,000+ Years as PAYE Director6 years 0 yrs2 yr Statutory Min20 yrs Weekly Gross PAYE Salary£520/wk £180/wk£700 Statutory Cap Option A: Keep Trading via HMRC Time-to-Pay ~£2,422 / month over 12 months ✓ Under £30,000 threshold: Eligible for HMRC Express Self-Serve / Direct Debit Time-to-Pay arrangement without full security. Option B: Estimated Director Redundancy Claim (Gov RPS) £6,552 Tax-Free Estimate Includes ~£3,900 statutory redundancy + ~£2,652 statutory notice pay from the National Insurance Fund (Form RP1/RP2). Often covers 100% of liquidation costs. 📄 Download B2B HMRC Time-to-Pay Proposal, Cashflow Table & s.172 Board Minute (£29 Instant Pack)🏪 Commercial Rent (CRAR) & Trade Creditor Pack (£19) Need free confidential charity guidance for a sole trader or SME? Call **Business Debtline** free on [0800 197 6026](tel:08001976026) (uk\_b2b\_corporate\_insolvency self-serve governance triage). 🏠 Ofgem ECO4 & £7,500 Boiler Upgrade Scheme (BUS) • 2026 Funding Open12 Verified UK MCS-Accredited Installers ### Cut Monthly Energy Bills by £650–£1,100/yr: Check £7,500 Heating & ECO4 Grant Eligibility If anyone in your household receives **Universal Credit, Pension Credit, PIP, Attendance Allowance, Carer's Allowance, or Council Tax Reduction** (or your household income is under £31,000 under ECO4 Flex), you may qualify for 100% funded insulation, solar, or the **£7,500 Government Boiler Upgrade Grant** with zero repayment required. ✓ £7,500 BUS Voucher✓ ECO4 Flex Low-Income Route✓ Direct MCS-Certified Assessment Check My Postcode for £7,500 / ECO4 Grants →Takes 45 seconds • No impact on credit score - **[Check Unclaimed Council Credit Balances & Band Reductions (CouncilCredit.co.uk)](https://councilcredit.co.uk?utm_source=crisiscompass&utm_medium=sovereign_hub)** — SI 1992/613 Reg 14 • Household & CommercialSearch Ledger →UK councils hold over £310m in unrefunded credit balances from closed accounts, overpayments, and backdated Band A–H revaluations. Check if your council owes you a BACS refund. - **[Reclaim Backdated Small Business Rates Relief (RatesReclaim.co.uk)](https://ratesreclaim.co.uk?utm_source=crisiscompass&utm_medium=sovereign_hub)** — LGFA 1988 s.43(4B) • UK Shopfronts, Workshops & OfficesCheck Relief →Sole-property UK businesses with a Rateable Value ≤ £12,000 qualify for 100% Small Business Rate Relief. Audit your property or refer a local business for a £75–£150 partner referral reward. ## Recommended free services Trusted organisations that can help — all completely free to use. [📞 StepChange Free debt advice · 0800 138 1111 ](https://www.stepchange.org/)[📊 ClearScore Free credit score & report ](https://www.clearscore.com/)[🏗️ Loqbox Build your credit score for free ](https://www.loqbox.com/)[⚖️ Compare Debt Solutions IVA vs DRO vs Bankruptcy vs DMP ](/compare) ### Get weekly financial tips Practical advice on debt, benefits, and building a stronger financial future. Join 2,000+ readers. Subscribe ## Related articles - **[The 12-month financial recovery plan: month by month](/blog/one-year-financial-recovery-plan)** — Recovery - **[From £22,000 in debt to debt-free: how real people recovered](/blog/debt-story-recovery-possible)** — Recovery [Take the Survival Check](/check)[Compare Debt Solutions](/compare)[Explore Free Tools](/tools) Some links on this page may be affiliate links. We only recommend services we genuinely trust. Using these links helps fund CrisisCompass at no extra cost to you. 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