The practical picture
When a reputable DMP provider (StepChange, PayPlan or similar) sets up a plan with a proper Standard Financial Statement, most mainstream lenders accept the reduced payments and freeze interest within 3-6 months. Some freeze immediately; others require a settling-in period.
The typical pattern is: reduced payments accepted straight away, then interest reviewed after 6-12 months of consistent payments and frozen going forward. Some creditors periodically re-review and can restart interest if they believe your circumstances have improved.
What happens if interest is not frozen
If a creditor continues to charge interest at their standard rate — which for credit cards is often 25-35% APR — the reduced monthly payment may barely cover the interest, meaning the balance shrinks very slowly or not at all.
This is one of the main reasons DMPs can take 8-15 years to complete: even with reduced payments, unfrozen interest keeps the total debt near where it started.
If a specific creditor refuses to freeze interest and their debt is a significant portion of the total, a formal solution (IVA, DRO, bankruptcy) often makes more sense because interest is legally frozen in those routes.
Charges and fees
Late payment charges and missed payment fees also depend on the creditor. Most will stop adding these once a DMP is in place, but some will not.
Default fees, arrears charges, and collection fees all vary. Charities-run DMPs tend to negotiate more consistently on these than commercial fee-charging DMP providers.