Do you need to pay for a debt management plan || 03338803165

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Do you need to pay for a debt management plan?

Most of the debt management plan (DMP) providers do charge some money for the services they provide but there are some who don’t charge a single penny. Always keep in mind that if you don’t or can’t pay a fee, it is not at all necessary. All you need to do is find someone who provides a Debt Management Plan in the UK for free.

In this article we will try to explain the process of finding a free DMP provider in UK and what to do in case you are willing to choose one that is not free.

Why is there a fee for DMP providers?

A DMP provider usually works on your part to design a custom plan which is feasible for you to manage a payout, arranging as well as negotiating the payouts with the concerned creditors, and preparing you to distribute the payouts to your creditors every month without fail. Subsequently, if any organization or company helping you to do so by giving a professional service will naturally cost you to cover everything according to the laid out plan.

Almost every Debt Management Plan in the UK covers such expenses by taking a certain fee from their customers. Although most of the free DMP service providers are usually charities like StepChange Debt charity, get paid directly by the banks and credit card companies in the form of donations, therefore they don’t have to charge their customers.

Is chargeable Debt Management Plan better than the free one?

It is a very common practice by DMP service providers to say that one will get a better service if they are paying a charge for Debt Management Plan. They also argue that since they are getting paid, they’re working in the best interests as compared to those of your creditors. Now it solely depends upon the client to judge for them what they think about this plan.

Locating a free Debt Management Plan in UK

Currently there are certain big free DMP providers:

National Debt line

National Debt line is a national telephone helpline which provides free debt advice to people who are facing debt problems. They will analyze the financial situation of the applicant and give debt advice and even provide a self-help kit. If it is applicable, the IVA adviser can also refer to a free DMP.


StepChange has already been mentioned above, is a charitable organization which gets donations by any bank or institution to give free credit help for the people of the United Kingdom. It functions in the way that it first takes an interview over a phone (sometimes in person), analyzes the debt situation and then reviews debt history and provides a solution based on the report generated by them.

Pay plan

Pay plan is an organization which gives a free Debt Management Plan to the natives of the United Kingdom. They are independent and get their funds from the credit industry. They will analyze the financial situation and accordingly provides a repayment plan.

If you are only looking for a free Debt Management Plan, it is advisable to search or look out for more such providers so as to compare and evaluate their debt services and choose the most perfect one which is feasible.

If going forward with a fee-charging Stepchange Debt Management Plan in UK

When going forward with a fee charging DMP, always keep in mind:

  • The DMP will last longer if there is no fee involved, because there will be less money to spare for monthly payouts to your creditors
  • Always look for all the charge that is going to be made in your Debt Management Plan in United Kingdom and only sign the deal when you are okay with it
  • It is a rule that the money to be paid to the debt service provider cannot exceed 50% of the money as 50% should be given to the creditors’ repayment
  • The costs of managing Debt Management Plan should be spread evenly
  • In case you cancel you’re Debt Management Plan, no fee or charge is refunded in any case

It is always advisable to go for research carefully and select the Debt Management Plan which provides the best plan which is feasible for you.

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