A Debt Management Plan (DMP) is a sponsored repayment plan negotiated for you by a non-profit credit counseling agency. The agency works on your behalf to reduce the interest rates on your personal loans and credit card accounts, and create a payment plan. This plan will require fixed monthly payments for a maximum of five years.
Interest Rate Reduction
Fee Per Enrolled Debt
If you are finding it challenging to make a dent in your debt because you have high interest rates on your credit cards and/or loans, a DMP may be an option for you. However, this plan may not work for you if you don’t have steady income. The DMP will have fixed monthly payments for up to five years. Missing even one payment could nullify the plan and result in your interest rates returning to their higher levels.
There are other options to resolving your debt. You may want to consider a debt settlement plan, debt consolidation or filing bankruptcy. You can also contact your creditors individually to see if they offer hardship plans.
Start by assessing the amount and type of debt you have. You can use this tool to help you assess if you have too much. You can determine how long it will take to pay off your current credit card balance with this credit card payment calculator. Then do a quick check of the savings you may get on your unsecured debt with a debt management calculator. If you’re then convinced that a DMP is the right option for you, you’ll need to contact a licensed credit counseling agency in your state.
These agencies should have counselors certified and trained in consumer credit, money and debt management, and budgeting. The FTC cautions consumers to avoid agencies that won’t provide free information about their services without requiring that you provide information about your situation. Once you identify some potential agencies, you can check to see if there are any complaints against them with your state Attorney General and local consumer protection agency. The FTC recommends that you then narrow your list to a few companies you will interview to make your final selection. Some of their recommended interview questions include:
The FTC’s Consumer Information website provides a detailed list of questions.
Questions to ask a credit counseling agency — This FTC article includes a list of questions that can help you select the right credit counseling agency.
Assess your debt – Helps you answer the question, “Do I have too much debt?”
Debt settlement agreement – Build the contract for your settlement documenting the criteria you negotiate with your creditor.
Debt consolidation calculator – Assess if debt consolidation is a viable option for you.
Credit card payment calculator – Discover how long it will take to pay off your current credit card balance.
If you’d like to consider all of your options, Resolve is here to help. Although Resolve is not a credit counseling agency, we can assess your situation and show you your options for paying off your debt, including a DMP, if appropriate. Our Resolve platform and debt guidance are free. You can review and compare debt relief paths and ask our experts questions without cost. If you then choose to work with one of our Resolve Network Partners, we would inform you of the fee for their service.
Your first step is to complete your profile here. Then our system will determine if credit counseling may be a good option for you and will point you in the right direction for next steps. We’re also happy to speak with you to discuss your situation further. Just send us a message.
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