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Choosing Credit Counselors: Debt Management Plans

(continued from Choosing a Credit Counselor: Questions to Ask)...

DEBT MANAGEMENT PLANS

If your financial problems stem from too much debt or your inability to repay your debts, a credit counseling agency may recommend that you enroll in a debt management plan. A DMP alone is not credit counseling, and DMPs are not for everyone. Consider signing on for one of these plans only after a certified credit counselor has spent time thoroughly reviewing your financial situation, and has offered you customized advice on managing your money. Even if a DMP is appropriate for you, a reputable credit counseling organization still will help you create a budget and teach you money management skills.

HOW A DMP WORKS

You deposit money each month with the credit counseling organization. The organization uses your deposits to pay your unsecured debts, like credit card bills, student loans, and medical bills, according to a payment schedule the counselor develops with you and your creditors. Your creditors may agree to lower your interest rates and waive certain fees but check with all your creditors to be sure that they offer the concessions that a credit counseling organization describes to you. A successful DMP requires you to make regular, timely payments and could take 48 months or longer to complete. Ask the credit counselor to estimate how long it will take for you to complete the plan. You also may have to agree not to apply for — or use — any additional credit while you’re participating in the plan.

A debt management program is just one of many debt solutions that ACCC offers. If you are seeking debt relief or help with credit card debt, contact ACCC here. When you contact our approved credit counseling agency, a certified credit advisor will help you evaluate your current financial situation and provide you with personalized debt solutions based on your goals.

(continue on to Choosing a Credit Counselor: Is a Debt Management Plan Right For You?)...

American Consumer Credit Counseling (ACCC) is a nonprofit organization offering free credit counseling sessions for consumers throughout the country. For anyone considering debt settlement program or working with credit card settlement companies, our counselors can explain the details of the credit card settlement process, discuss the debt settlement credit impact, outline the worst and best debt settlement scenarios and discuss other pros and cons of debt settlement. We can also help consumers explore the benefits of a debt management plan vs debt settlement, and answer questions like “How bad does debt settlement hurt credit?” and “Is debt settlement a good idea?” as well as “Does debt settlement work?”

American Consumer Credit Counseling - Consolidate Debts - Better Business Bureau American Consumer Credit Counseling - Consolidate Debts - Mass Housing Approved National Industry Standards for Homeownership Education and Counseling American Consumer Credit Counseling - Consolidate Debts  - Council on Accreditation American Consumer Credit Counseling - Consolidate Debts  - NFCC Member