The informal negotiation approach
Prepare a Standard Financial Statement showing your income, essential outgoings, and available surplus.
Calculate a pro rata offer for each creditor: (your surplus / total debt) × their debt = their monthly payment.
Write to each creditor explaining your circumstances, attaching the SFS, and making the pro rata offer.
What creditors typically do
Mainstream lenders often accept 3-6 month arrangements based on SFS offers. Longer-term acceptance is less predictable.
Some creditors freeze interest and charges; some do not.
HMRC and council tax usually go through their own systems (Time to Pay, council instalment plans) rather than informal creditor negotiation.
The credit file impact
Reduced payments will typically show on your credit file as partial or missed payments for six years from when they start.
This is broadly similar to a DMP's impact.
When formal is better
If you have many creditors (5+), coordinating individual negotiations is time-consuming. A DMP provider does this for you.
If some creditors are uncooperative and adding interest, the informal approach can leave you making minimal progress. A formal solution (IVA, DAS, DRO) offers legal protection.
If the arrangement needs to last more than 2 years, a formal approach usually manages the ongoing negotiation better.