Is a DMP the same as an IVA?
Individual Voluntary Arrangement against Debt Management Plan on duration, cost, your home, your credit file and what gets written off. An honest comparison, with the risks of both.
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Quick answer: IVA vs DMP
| IVA | DMP | |
|---|---|---|
| Formal? | Yes — legally binding insolvency procedure | No — informal agreement |
| Debt written off? | Remaining included debt at completion | No — aims to repay in full |
| Typical duration | 60 months (72 with homeowner equity terms) | Until repaid — depends entirely on surplus |
| Home implications | 2025 Protocol excludes the family home; equity terms may extend term | None directly |
| Credit file | Six years from the IVA start date | Markers/defaults on included accounts; no single entry |
| Public register | Yes — Individual Insolvency Register during the IVA | No |
| Fees | IP fees from within contributions | Free via charities; commercial firms charge |
| Creditor protection | All included creditors bound after 75%-by-value approval | Discretionary — creditors can continue action |
| Can terms change? | Annual review; variations need creditor approval | Flexible at any time |
The comparison in full
| Individual Voluntary Arrangement | Debt Management Plan | |
|---|---|---|
| Legally binding on creditors | Legally binding on included creditors | None — entirely voluntary |
| Duration | 60 months, or 72 with home equity | Until the debt is repaid — no fixed end |
| What you pay | Monthly, affordability-based | Monthly, flexible, changeable |
| Cost to you | Paid from your monthly payments | Free providers available |
| Your home | Excluded; equity sets the term | Not affected |
| Credit file | 6 years from the start date | Defaults recorded, 6 years each |
| Public record | Yes — Listed on the public Individual Insolvency Register, which anyone can search. Your address can be withheld only on evidenced safety grounds. | No |
| Debt written off | Yes, at the end of the term | No |
| Where it applies | England, Wales and Northern Ireland | The whole of the UK |
Circumstances an authorised adviser may consider when comparing an IVA
People with multiple unsecured debts, a reliable monthly surplus, and often assets or a home they want to protect. The 2025 IVA Protocol indicates typical suitability includes several debts totalling around £7,000 or more, and not being eligible for a DRO.
Circumstances an authorised adviser may consider when comparing a DMP
People whose difficulty is temporary or whose debts are repayable in a reasonable period, and who want to avoid insolvency, protect a professional role, or keep the flexibility to change their mind.
The verdict
Choose a DMP if your difficulty is temporary, your debts are repayable in a reasonable period, or you have a professional role that insolvency would complicate. Choose an IVA if the debt is genuinely beyond repaying, you need the interest legally frozen, and you want a definite end date. If a DMP would take more than about ten years, that is a signal an IVA or another formal route deserves a serious look.
Risks on both sides
- If you stop being able to pay, the IVA can fail. Interest and charges can be added back on and creditors may petition for your bankruptcy.
- Fees reduce what your creditors receive, so more of your payment goes to costs than in a free Debt Management Plan.
- It is a public record for the duration.
- Holding £10,000 or more of beneficial interest in a family home means a 72-month term rather than 60.
- Some debts cannot be included — student loans, court fines, child maintenance and secured debts among them.
- Creditors are not obliged to freeze interest, and some do not. The balance can grow while you pay.
- No legal protection — court action and enforcement remain possible.
- Long plans can run for a decade or more, which is often worse than a formal solution.
- Your credit file is still damaged by the reduced payments.
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