Debt Management

Debt Management Program

Debt Management Programs (DMPs) is a feature service offered by Credit Counseling Agencies (CCAs) to help consumers pay back unsecured debt. DMPs allow consumers to pay off their unsecured debts, such as credit card balances, by making a single, consolidated monthly payment to the CCA, which then disburses those funds to the creditors of debts covered by the DMP.

When administered properly, DMPs can benefit consumers because some creditors will reduce interest rates and waive certain charges, such as late and over-the-limit fees, for consumers on a plan. DMPs can also benefit creditors by forestalling consumer bankruptcy. DMPs work well for some people, but not for everyone.

The debt management program needs to be individually designed to provide consumers with a unique solution for their financial situation. Professionally trained and independently certified counselors evaluate your financial situation, assist you in creating a budget, and work with creditors to negotiate a possible reduction in:

• Finance charges
• Late fees and/or over-limit charges
• Monthly payment
• Pay-off time

The debt management program will help you simplify your financial monthly commitments since CCAs will consolidate your payments into one simple monthly payment and disperse to your creditors on your behalf.