Frequently Asked Questions

What is a Debt Management Plan (or DMP)?

A Debt Management Plan (also known as a DMP) is a sponsored repayment where you work with a a non-profit Credit Counseling Agency to pay back your existing debts. These plans typically last for about 4 or 5 years (maximum of 60 months) and will include a fixed payment due…

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. Whereas Debt Consolidation usually means taking out a large loan from a creditor to cover the balance of all of your existing loans and credit…

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.Doesn’t impact credit score.You won’t have to deal with collectors.You won’t…

What are the risks of a DMP?

They’re rigid and inflexible. If you miss a payment, the plan is typically over. So for example, you could spend 2 years on the plan and miss one payment and have it go back to the original interest rates.Accounts enrolled in the plan will be closed. This means that when…

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 at $50 and a certain percentage of people enrolled in a…

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 pay off time of 60 months or less. This can shave 15 or more years off of a person’s…

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 cannot exceed 60 months of repayments. You can finish them faster by paying extra when you have more to give, but you will not be able to extend the plan beyond 5 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.

What happens if I miss a payment in the DMP?

If you miss a payment, the plan is typically over. So for example, you could spend 2 years on the plan and miss one payment and have it go back to the original interest rates, so it is in your best interest to make sure you can cover these monthly…

Can I do a DMP on my own?

No, a Credit Counseling agency will need to do this for you. However, having said that, your creditors individually may offer hardship plans. You also have the choice of which agency you’d prefer to work with, but keep in mind that they typically all operate in the same way.

How does Resolve help with Debt Management?

We can connect you to a trusted partner, who will talk to you at no cost and provide an exact payment quote. Then you can evaluate if it’s a good option for you and your financial circumstances.

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 a DMP provider to get an exact quote. You…

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…

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