ou may be eligible to enroll in a Debt Management Plan (DMP). A DMP is a systematic way to pay down your outstanding debt through monthly payments to your credit counseling agency who will then distribute these funds to your creditors. By participating in this program you may benefit from reduced or waived finance charges, fees, and fewer collection calls. When you have completed your payments it may help you reestablish credit.
t takes approximately 36-60 months to repay debts through a DMP. Your accounts with creditors will always be credited with 100 percent of the amount you pay through an NCCB member agency. A DMP serves the dual role of helping you repay your debts while creditors receive the money owed to them.
or those with considerable debt problems, a financial counseling session is an effective first step to help you manage your finances better, and if appropriate, entering into a Debt Management Plan can start you on the road to financial stability.
A DMP sets up a payment schedule for you to repay your debts. By voluntarily agreeing to 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 the agency you are working with. You may also receive a reduction or waiver in finance and/or other charges. When you have completed your payments the agency will assist you in reestablishing your credit.
But remember, the goal of the DMP is to develop a plan to ultimately improve your financial and credit standing.
When you complete the DMP some creditors may reestablish your credit based on your current ability to pay and your payment history while enrolled in the plan.
Your Certified Consumer Credit Counselor will be able to tell you if any of your creditors will consider stopping interest charges. However, the majority of creditors do not stop interest, but many lower the interest rate.
For the most effective and equitable treatment of your debts we need to include all debts in your DMP.