Frequently Asked Questions

Is debt management the same as debt consolidation?

Nope. Debt management usually involves working with a credit counseling agency that seeks to lower interest rates on your existing loans and credit card debts. Debt consolidation, on the other hand, usually means taking out a large loan from a creditor to cover the balance of all your existing loans…

How does a DMP work?

In order to begin a DMP, you will need to reach out to a Credit Counseling Agency licensed in your state. The agency will work to reduce the interest rates you are currently paying so you can bring down more of the principle. However, you will need steady income as…

What are the benefits of a DMP?

On average, your interests rates for both credit cards and bank loans will be reduced down to 6%, which means lower monthly payments.They may make it more affordable and have a fixed pay off time of 60 months or less.You won’t have to deal with collectors.If you make your agreed-upon…

What are the risks of a DMP?

A DMP requires somewhat consistent monthly payments. If you miss a few payments, your plan could end and your debts would go back to the original interest rates.Accounts enrolled in the plan will be closed. This means that when the DMP is over, while the debt is paid and your…

How much does a DMP cost?

These plans are highly regulated so fees vary by state. Typically, a nominal fee is built in to your monthly payment that will always be between 1.7 and 2.5 percent of your total balances enrolled. Most states cap fees between $50 and $75 and a certain percentage of people enrolled…

How does saving in interest help me?

On average, your interests rates for both credit cards and bank loans will be reduced down to 6% with a DMP, which means lower monthly payments for you. DMPs have a payoff time of 60 months or less. This can shave 15 or more years off of a person’s credit…

When does the DMP start?

You will get together with the nonprofit credit counseling agency who will help you determine the right start date for your DMP.

How long does a DMP take?

Debt management plans typically last 36 to 60 months but cannot exceed 60 months of repayments. You can finish them faster by paying extra when you have more to give, but you won’t be able to extend the plan beyond five years.

How is my estimated completion date determined for a DMP?

Debt management plans cannot exceed 60 months of repayments, which we have calculated for you. You can finish a DMP faster by paying extra when you have more to give, but the plan cannot be extended beyond 5 years (60 months).

How do DMPs impact my credit score in the beginning?

There should be no meaningful impact if you have maintained on time minimum payments. If you already have late payments prior to the DMP, the credit damage has already happened.

What will show on my credit report during a DMP?

Nothing negative should appear on your credit report during this time. Your report should show that you’re making your payments on time. Some of the accounts may show you are enrolled in a DMP.

How will my score change during and after a DMP?

Your score shouldn’t be impacted during or after a DMP. Your utilization should come down which can help your credit score. However, because your accounts in the plan typically get closed, you will lose some “account type” diversity, which can be replaced later.

When will I be able to get a credit card, loan, car and/or mortgage after a DMP?

You can apply for car loans, student loans, and mortgages while in a DMP, and certainly after. It is often best to wait until you complete your DMP before applying for new credit cards and unsecured loans.

Why do I see so many payments for a DMP?

Debt management plans cannot exceed 60 months of repayments. You can finish a DMP faster by paying extra when you have more to give, but the plan cannot be extended beyond 5 years (60 months).

Why do I see a range in payment amounts for a DMP?

Debt management plans are estimated between 1.7 and 2.5 percent of your enrolled debt (the accounts accepted into the plan). If you enroll $30k in a DMP, your new monthly payment will be between $510 and $750. You need to contact an accredited DMP provider in your state to get…

Why do I see a range in interest savings for a DMP?

Your DMP will have a set monthly payment, and cannot last longer than 5 years. This means you are out of debt far faster than if you were to just make minimum payments on the balances you owe as of today. The interest rate savings range is there to show you…

Why is there a monthly fee for a DMP?

The nonprofit credit counseling agency that will implement your DMP charges a nominal monthly fee to administer your plan, remit payments to creditors, etc.

Why aren’t all of my debts included in the DMP?

Here are some possible reasons your debts have been excluded from the plan: The creditor you’ve listed may not be in our system. If you do not see it listed, please check the spelling and/or contact support@helloresolve.com to let us know what type of debt you are trying to enter so we…

Does Resolve offer Credit Counseling services and/or DMPs?

Unfortunately, we do not offer either of these services at this time, as we are not a Credit Counseling Agency. However, once you complete your profile, our system will be able to determine if Credit Counseling may be a good option for you and will point you in the right…

What happens if I miss payments in the DMP?

The DMP requires somewhat consistent monthly payments. A few missed payments could result in the plan ending and your debt going back to the original interest rates. It’s in your best interest to make sure you can cover these monthly payments for an extended period of time.

Can I do a DMP on my own?

No, a credit counseling agency will need to do this for you; however, some creditors may offer hardship plans to you directly. If you decide that a DMP is the right option for you, you’ll need to contact a licensed credit counseling agency in your state. Both the National Foundation for…

What is a Debt Management Plan (or DMP)?

A Debt Management Plan (also known as a DMP) is a sponsored repayment plan where you work with a nonprofit credit counseling agency to pay back your existing debts. The plan puts all your qualified debts into a single payment, reduces interest rates and often eliminates fees. These plans typically…

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