What is a Debt Management Plan?
A DMP sets up a payment schedule for you to repay your debts. By voluntary agreement, you deposit funds with your credit counseling agency each month. They send those funds directly to your creditors. If collectors call, you can ask them to contact us. You may also receive a reduction or waiver in finance and/or other charges. When you have completed your payments, we will assist you in reestablishing credit.
A Debt Management Plan, or DMP, is another debt relief option that serves as an alternative to debt settlement. We can help you set up a debt management plan through our Think Debt Relief credit counseling program. Unlike debt settlement, a debt management plan usually requires you to pay back 100 percent of what you owe; there are typically no debt relief negotiations with your creditors to settle your open principal balances for less than what you owe. However, a debt management plan can have less of a credit impact than debt settlement. And since you’re committing to pay back your full balances, your enrollment in a debt management plan may allow us to negotiate with your creditors for other benefits that may not be available in a debt settlement: • Interest-rate reductions • Lower monthly payments • No late fees • No over-the-limit fees • Additional help with bringing your account current A credit counseling debt management plan may be a better solution for you than debt settlement
