Debt Management Plan or DMP is a program that helps you to get out of debt in 5 years or less. It lets you make only one monthly payment that will cover all your unsecured debts, which are included in your debt management plan. A DMP is not a loan but allows you to pay less than you owe. It will simplify the repayment process for you, and you can get out of debt quickly. Get Free Debt Advice in Washington to manage your debts.
How Does a Debt Management Plan Work?
Where to Go?
Credit counseling agencies are the ones that offer you debt management plans. If you have made up your mind this way, you should start looking for an agency that is a nonprofit certified by the National Foundation for Credit Counseling. You will be provided with a credit counselor who will thoroughly review your financial situation.
What Will Your Credit Counselor Do?
He will review your assets, income, expenses, and debts. He will provide you with a manageable budget that you have to follow. He will access your credit card debts, submit a proposal to your creditor on your behalf, and talk to your creditor to lower the interest rates.
Once your credit counselor accepts your proposal, American Consumer Credit Counseling Inc. (ACCC) will set up an account for you. In DMP, you only need to make one monthly payment to your creditor, and he will pay all your bills on your behalf. Your creditor will update you on your monthly stats, so you should know how close you are to being debt-free.
What is covered?
A DMP will cover your unsecured debts like credit cards or personal loans. Secured debts like a house or car loan are not included in a DMP. Know about the Free Debt Relief Programs in Washington to choose one to get out of debt.
What Should You Expect Being In a DMP?
You will be asked to live without credit cards during the DMP. Your creditor will only allow you to use the credit card in emergencies, but you need to ask them before use. Avoid taking any new credit card debt while being in the DMP. If you do so, your outstanding debt will be reflected on your credit report, and your creditors will withdraw their concessions.
You need to stick to the plan and pay the payment on time. The creditors will provide you with concessions, so you need to meet their terms. One missed payment, and you will be charged waiving fees.
What Are The Perks Of DMP?
- You only have to make one payment to multiple creditors.
- Lowers your monthly payment towards debt.
- Pay off debt quickly.
- You will pay off your debt without bankruptcy or debt settlement.
How to Enroll For a DMP?
It would help if you found a reputable credit counselor. You can check for a nonprofit credit counselor on the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA). Find the Best Debt Settlement Arrangement in Washington to pay off your debt efficiently.