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Debt Management Plans (DMPs)

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Debt Management Plans (DMPs)

What is a Debt Management Plan (DMP)?

A debt management plan is an informal and flexible way of helping you manage your debts and get back on track. A debt management plan involves us working out a budget with you which includes all of your essential household expenses such as your rent, mortgage, utilities and food shopping. The money that is left over will be used to pay the people that you owe money to (your creditors). This is called your ‘disposable income’.

You would pay Angel Advance a fee each month to manage the plan on your behalf. This would include initial contact to all of your creditors to try and agree a reduced repayment for each debt, ongoing contact with your creditors and a dedicated account manager throughout the term of your plan. Please see our Frequently Asked Questions – What will you charge page for more detail and examples. All of your creditor payments, as well as our fee, is paid out of your disposable income, meaning that you only have to manage a single payment to Angel Advance each month.

During the time that you are on the plan we will ask you not to take out any further credit. ‘Further credit’ includes the continued use of revolving credit facilities such as credit cards, catalogues or store cards. If you do, your creditors are within their rights to refuse a reduced repayment offer and will probably request full contractual payments (i.e. the original amount/rate of payment that you agreed to when you signed the agreement) towards the debt.

In the vast majority (99.48%) of cases, creditors will stop applying interest and charges, so the money you pay will come straight off the balance.

We will manage the contact with your creditors and provide them everything they need. So, as long as you keep in touch with us, your creditors shouldn’t need to contact you.

You will just make one monthly payment to us, instead of paying all of your creditors individually.

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If your circumstances change, we will renegotiate the payments with your creditors.

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You will have an online account which you can use to view your account and make changes.


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Your creditors don’t have to agree to the repayment, or to freeze interest and charges.

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A debt management plan doesn't protect you from further recovery or legal action from your creditors.

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Your credit rating will be impacted because you’ll be paying reduced amounts to each creditor. If you’ve been missing payments to your debts it is likely that your credit report will already have been impacted.

DMP Frequently asked questions


You will make one, affordable monthly payment into your plan which is worked out by taking all your regular spending (including safety nets for one-off expenses) from your total income. We work with you throughout the plan to ensure your budget allows you to live comfortably

The plan is very flexible, so you can change the amount you pay whenever your income or regular expenses change. For example, if your income drops, then you can lower the amount you pay accordingly.

Our fees for setting up and managing your plan are taken from your agreed monthly payment so there is nothing extra to pay.

Whilst we're setting up your plan, we'll charge £50 from each of your first 6 monthly payments. This fee covers:

Identity check and reviewing documentation
Initial contact with all creditors to notify them about your plan
Negotiation of monthly repayments with all creditors
Handling all correspondence, you send to us
Regular updates to let you know how everything is going
Budget check-ins to see if changes to your budget are needed

After month 6, we reduce our monthly fee to £39.50 each month once the core negotiation work on your behalf is done. This fee covers:

Ongoing management of creditor contact
Monthly payments to all your creditors
Monthly statement of account
Annual review of budget and plan suitability
Help and support from our Customer Services team when you need it
24-hour access to your online account

Any fee we charge is capped at 49% of your payment. So, if you need to make a reduced payment, then we ensure more than half of your payment is distributed to your creditors.

If you are unable to pay in any month, then no fee is charged.

There are no other fees for running your debt management plan.

Below is an illustration of the cost of a typical plan:

Non priority debt £8,600
Number of creditors 6
Monthly payment £185.00
Monthly Set-up fee - Months 1 to 6 £50.00
Monthly management fee - Month 7 onwards £39.50
Plan length 60 months
Total amount payable £11,033
Total fees payable over the period £2,433

In this example, all interest and charges have been frozen


Angel Advance offers free debt advice but there is a cost for our Debt Management Plan (DMP). There are several sources of free Debt Management Plans available to all consumers. For further information please visit www.moneyhelper.org.uk. Money Helper is an arms-length organisation set up by the government to be a trusted, free source of information and guidance.


We can include debts such as bank account overdrafts, credit cards, catalogues, store cards, unsecured loans and payday loans.

It is essential that you continue to make payments on secured debts such as mortgages and car hire purchase agreements because if you fail to keep up repayments to these debts, the lender may consider legal action or repossession. You must also maintain payments for priority debts including rent, council tax, gas and electricity as failure to maintain these repayments could lead to (in the case of rent) eviction, or the loss of essential goods or services. For more information, please see our different types of debt page.

You will also still be responsible for paying student loan repayments and payments required by the Child Support Agency.

We account for the need to maintain these payments when we calculate your single, lower, monthly payment.


Once you have signed up to a DMP, our Creditor Liaison Team will negotiate with your creditors and request that interest and charges on each debt are frozen. This means that the money we send them will reduce the balance at a quicker rate. Please note that your creditors do not have to agree to the reduced offer and, in some cases, interest and charges may still be added – but this is rare.

They may also decline your offer if they believe that you are able to pay more than you are suggesting, or you do not maintain regular payments.


As soon as you have given us written permission, we will contact your creditors straightaway to notify them that we are working on your behalf. This should contribute towards reducing creditor contact; however, you may still receive some contact in the early stages of your DMP.

Do not ignore the calls; please notify them that you have now appointed Angel Advance to act on your behalf. Remember, it is our job to deal with your creditors going forward, therefore we ask that you send any letters or statements to us using the upload documents feature in your online account.


Once you have signed up to a DMP, your payments to each creditor will be calculated on a pro-rata basis. This means that whatever money is left over from your essential expenses will be split between your creditors on a percentage basis according to the total amount that you owe to them. Payments will be sent to your creditors within 5 working days of us receiving your payment.


If you have experienced financial difficulties your credit rating may have already been affected. Lenders will report to credit reference agencies when payment are missed, or when reduced payments are made. They can also register a default to show that you couldn’t maintain the original payments. This information will remain on your credit file for 6 years and will affect your ability to obtain credit.


Payments to your rent or mortgage are considered a priority so if you keep up with your payments to your rent or mortgage, your DMP should have no direct effect on your home. However, if you want to apply for a mortgage or a new tenancy agreement a DMP may affect this.


No. You must ask our permission before incurring any further debts because increasing your borrowing could mean a DMP is no longer suitable for you and you may need to look at another solution. You’ll struggle to get further credit whilst in a debt management plan anyway because you won’t be able to demonstrate that you can afford to repay it.


You can cancel your debt management plan at any time by giving us 28 days’ notice. There is no cost to cancel. If you change your mind within the first 14 days of your plan (cooling-off period), you may be entitled to a refund of any fees that you have paid.


Apply for a Debt Management Plan