A debt management plan (DMP) is an informal agreement that is made between yourself and a creditor (someone who you owe money to) to pay off unsecured debts in installments over time.
It’s not a legal agreement and can be cancelled by either party at any time.
A DMP is often used when you’re only able to make small monthly payments or have short-term financial issues and will be able to make repayments in a few month’s time.
It can be arranged either directly with a creditor or through a debt management company. If you go through a debt management company,  you have the option to pull all your debts together and repay more than one creditor.
DMPs can’t be used to repay ‘priority’ debts (mortgage or rent arrears, gas and electricity arrears, council tax arrears, income tax or VAT arrears, TV licence arrears, court fines or maintenance arrears), but are commonly used to help settle money owed on credit cards, bank loans, mobile phone contracts or store cards.
There’s no obligation for a creditor to agree to a debt management plan and they’re not required  to freeze interest or further charges (whereas with an IVA, no further debt can be added), meaning that the amount owed can continue to increase. However, some creditors may choose to freeze the interest and hold off on extra charges if you’re good with making regular payments.