What is a Debt Management Plan?
Debt management plans are for people who can no longer meet the full monthly repayments on their unsecured borrowing, due to financial difficulties. The debt management company will negotiate with the creditors so that a lower monthly repayment can be agreed. Often the interest/charges will also be frozen, whilst the debt management plan is in force, so all the payments made to the creditor actually reduce the outstanding debt- not just pay the interest.
A debt management plan is offered by a credit counseling agency or a debt relief company when you need more than simple budgeting to help you pay off debt. The company negotiates with your creditors in order to help you get lower rates on your debts. This reduces your monthly payments such that you can pay your bills in time.
The DMP is a program used only when the consumer cannot continue to meet debt obligations on his own. Sometimes, due to any number of different circumstances, financial responsibilities can spiral out of hand. Thats when you need the professional help of CCCS. Your counselor will work directly with your creditors to create a repayment plan that often includes a lower monthly payment, stopped or lowered interest, late fees and overlimit fees. The result is an orderly debt reduction plan that you can live with. Once in place, you send the agreed upon amount to CCCS each month, and they disburse the payments to all of your creditors. You normally continue to receive the statements from your creditors, and CCCS also sends you a statement with each months activity outlined. If this sounds like the solution to your debt problems, contact us today.
