Money Advice, Debt Advice & Debt Help
How long will a Debt Management Plan last

How long will a Debt Management Plan last

How long will a Debt Management Plan last

A Debt Management Plan will normally remain in place until your debts are settled or repaid in full. Calculating how long it might last is therefore relatively straight forward.

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How long will my Debt Management Plan last?

If you use a Debt Management Plan (DMP) you still have to repay all of your debt. The length of your plan will depend on the amount you can pay. The time it takes to repay your debt is likely to be extended. To find out more please visit:

How to calculate how long your Debt Management Plan will last

It is relatively simply to work out how long your debt management plan (DMP) will last. You simply need to divide the total amount of debt you include by the monthly payment you will be making.

Lets say your total debt is £10,000 and you can afford to pay £120 per month. The estimated time it will take to repay the debt at this rate is 7 years:

£10000 / £120 = 83 months; 83 months / 12 = approximately 7 years

You can only ever estimate how long your debt management plan will last. A number of things could effect the length such as interest and charges and whether your payments go up or down.

Could your Debt Management Plan last longer?

There are different things that could mean your DMP will last longer. Firstly it is possible one or more of your creditors could continue to add interest or charges to your accounts. If they do the total debt you owe will increase and it will take longer to repay.

If you are using a commercial company to help manage your Plan they will charge for doing this. The fee will be deducted from your monthly payment and reduce the amount your creditors receive each month. The time your Plan lasts will be extended as a result.

Your financial circumstances might get worse meaning you have to reduce the payment you make. As a result your debt will be paid more slowly and the length of your Plan will increase.

After a few months of receiving the agreed reduced payments most of your creditors should stop additional interest charges. However this cannot be guaranteed.

How to pay off your Debt Management Plan more quickly

One of the advantages of a DMP is that there are options for paying it off more quickly. If your income gets better or your other expenses fall for for some reason you can increase the amount you pay into the Plan. Your debts will be paid faster and it will finish sooner.

Alternatively if you come into some money you can chose to pay off all your outstanding creditor balances in full straight away. It is also possible to approach your creditors offer to settle your debt early.

Very often if you have been in your Plan for 6 months or more all of your creditors will accept a lump sum of 50% of the balance outstanding to settle their debt in full. By making settlement deals with your creditors in this way you may be able to pay off your entire debt without having to use all of the cash you have.

If you receive a windfall while you are in your DMP you are not legally obliged to use this money to repay your debts. You are free to use the case for other things if you wish.

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