| Debt Management Plans | | | | impacts your credit and your credit score. Negative |
| Debt Management Plans (DMP) is placed one step | | | | and accurate information on your credit record is not |
| beyond credit counseling and a stone throw short of | | | | easy to remove despite any promises made. |
| bankruptcy. If you are too deep into debt and unable to | | | | Confirm what your monthly payment amount is and if |
| pay them, a credit counseling agency may | | | | you can afford it. Do not commit to something you |
| recommend Debt Management Plans. This is a serious | | | | cannot follow through. |
| step that should be considered carefully along with | | | | Credit counseling organization promises concessions |
| better money management skills and budgeting | | | | they can get from your creditors, such as lowering or |
| disciplines. | | | | eliminating interest charges and late fees. Confirm |
| Similar to prescription medication that you would only | | | | these with your creditors and see if there is a waiting |
| take after consulting a licensed physician, Debt | | | | period before these concessions kick in or do they |
| Management Plans should start only after you have | | | | start as soon as you enroll in a DMP. |
| talked it over with a certified credit counselor. Your | | | | Verify that your creditors are paid within the correct |
| certified credit counselor spends the time to review | | | | billing cycles and before their required payment due |
| your financial situation, consider alternatives, and help | | | | date. |
| you learn to handle money better. You want to stay | | | | Clarify the steps involved in getting status report on |
| out of debt after you get out of it. | | | | your account from your credit counseling organization. |
| What is Debt Management Plans? | | | | How often? How detail? Is it accessible by phone? |
| In simple terms, your credit counseling organization | | | | Any hesitancy on behalf of the credit counseling |
| begins to manage your debts on your behalf through | | | | organization to let you verify your account status is a |
| direct interaction with your creditors. They come | | | | big red flag that means you need to find another |
| between you and most of your unsecured creditors, | | | | organization to help you. |
| negotiate lower interest rates, eliminate certain fees, | | | | Find out if your creditors are willing to reset the clock |
| arrange payment amounts and prioritize which | | | | on your past-due accounts, wiping out the record of |
| creditors gets paid first. In short, almost everything that | | | | missed and late payments if you sign up with a Debt |
| could be done to get you out of debt fast. These | | | | Management Plan. This process is called re-aging your |
| plans cover most unsecured debts, like credit card bills, | | | | account. How many payments should you make |
| student loans, and medical bills. But secured debts such | | | | before your creditors are willing to do this? |
| as real estate loans fall outside of these plans. | | | | What to do after Debt Management Plan starts? |
| Before signing up with a credit counseling organization | | | | Once you sign up with a Debt Management Plan |
| for a DMP, verify any concessions your particular | | | | continue to be active with the process even though |
| creditors offer to that organization. All these | | | | emotionally you may want to wash your hands away |
| concessions from your creditors amount to one thing: | | | | and stay away. DMP does not relieve you of your |
| Lower your monthly payment and still get out of debt | | | | responsibilities it only helps you manage it better. |
| faster. In some cases, you will be able to pay you | | | | Keep in touch with your creditors and pay your bills |
| debts years earlier. Ask your credit counselor how | | | | until DMP goes into effect. If you haven't had any |
| much earlier you will get out of debt if you stayed on | | | | negative entries in your credit report by now, any late |
| course. | | | | payments, late and penalties can still be entered into |
| When DMP starts, you agree to send one monthly | | | | your credit report. |
| payment to the credit counseling organization and they | | | | Contact your creditors and confirm that they have |
| in turn make all the payments to your creditors for you. | | | | accepted the proposed Debt Management Plan |
| In the meantime, you may have to agree not to use or | | | | before you send any payments to the credit |
| apply for credit while you are participating in the plan. | | | | counseling organization for your DMP. |
| Is a Debt Management Plan Right For You? | | | | Call each of your creditors on the first of every month |
| Cover the following with your credit counselor before | | | | to make sure the agency has paid them on time and |
| you decide to participate in a Debt Management Plan. | | | | verify this by checking your monthly statements. Your |
| Find out if there are other options besides DMP | | | | monthly statement should also reflect any changes in |
| available to you. Is your DMP handled by the same | | | | your interest rates, waiving of the late fees and any |
| organization that also provides you assistance with | | | | other concessions you were expecting. |
| money and budget management during and after | | | | May you be granted freedom from debts both |
| DMP? If Debt Management Plan is handled by one | | | | physical and Spiritually. |
| organization and another handles your ongoing credit | | | | For more information about free credit reports, debt |
| counseling, how will you coordinate the two? | | | | management, and credit counseling checkout |
| Remember you want to stay out debt later. | | | | FreeCreditReports. |
| Find out how enrolling in a Debt Management Plan | | | | |