In 2012, North East Derbyshire Citizens Advice (NEDCAB) set up an award-winning debt advice website to allow users to run their own Debt Management Plans (DMPs). In 2014 this went nationwide and became the CABmoney system.
How self-administered DMPs work
In a DMP, you pay less than the normal amount each month to your debts – the amount you can afford is divided among your creditors who are asked to freeze interest and not add extra charges on. DMPs have advantages and disadvantages – even though getting the interest on your debts frozen may sound great, if it will take too long to clear your debts, then there may be a better debt solution for you.

CABmoney being used on a tablet
DMPs are often set up through firms, where you make one single payment each month to the firm which divides it between your creditors. If you set up your own DMP, you write to each creditor offering them their pro-rata share and ask them to freeze interest. CABmoney assists you to do this by:
- letting you look up creditors or debt collection agencies and automatically import their addresses;
- helping you to create a budget, converting weekly amounts to monthly, and warning you when amounts look lower or higher than normal;
- generating a Financial Statement for you, in a format that creditors will accept;
- calculating the pro-rata sharing of your surplus money between your creditors – these may be token offers of £1 or £5 a month if your surplus is low;
- generating the letters to your creditors; and
- letting you record creditors replies.
You can get an overview of how this works by looking at the sample CABmoney DMP here.
The information areas of the website are accessible to anyone without signing up. But to run your own self-administered DMP, you sign up with a user name and password so that your debt details can be stored and retrieved later.
As you will be making the same payments each month for a while, it’s a good idea to automate these by setting them up as Standing Orders.
The advantages of running your own DMP
Some people have to run their own DMP, as most DMP firms require you to have at least £50 a month to pay to your creditors. But even if you could use a firm, many people like self-administered DMPs for a variety of reasons including:
- you feel in control of the process, knowing exactly which creditors have agreed to accept the offer and freeze interest;
- you prefer not to discuss your budget with a DMP firm. If your budget changes, you just tell your creditors, no need to ‘ask permission’ from the DMP firm for a change;
- it will give your more flexibility over what you do if you get a lump sum, say from a payday loan refund, where you might want to make full and final settlement offers to a couple of your creditors rather than spread the sum between all of them.
Switching from a fee charging DMP firm
If you are already signed up with a commercial DMP firm that is charging you fees, you can switch to the CABmoney system and it will generate the necessary creditor letters. When all your money is going to your creditors, rather than a DMP company, you will get out of debt sooner.
This is an easy step to take. Yoru creditors are already used to you being in a DMP. Many of them may have sold your debt on to debt collectors. Don’t worry that a creditor will start charging you interest if you do this – lenders have to treat people who are self-managing a DMP in exactly the same way.
Will my creditors really take my letters seriously?
Yes they should. The CABmoney service generates your letters in a format that your lenders will be used to, with a Financial Statement containing the information lenders need.
Is this a lot of work?
I’ve looked at this question in detail here: Running your own DMP – how long does it take? It will be more work the more creditors you have. But after a DMP has been running for a few months it settles down and is just the odd letter.
Running your own DMP doesn’t appeal to everyone. If you want to use a firm to manage your DMP and deal with your creditors, make sure that the DMP provider you choose is a charity that doesn’t charge you any fees.
Georgia says
I like the idea of being in control but I’m worried about how much work it would be as I’ve got into this mess by having little time left between work and family. I’ve got 1 loan, 2 credit cards and 2 store cards.
Debt Camel says
hi Georgia, that is an important point. With 5 debts it shouldn’t be too bad, but I’ll do another article covering this – look out for it next week! Update: here it is https://debtcamel.co.uk/how-much-work-dmp/