We get this question a lot from individuals who are battling debt problems. So we figured that we’d give everyone a fairly in-depth and detailed explanation of what a Debt Management Plan (DMP) really is. The Wikipedia definition is very broad and general, but it states: “A debt management plan is a formal agreement between a debtor and creditor(s). Debt Management Plans help reduce outstanding, unsecured debts at a reduced level over a fixed period of time to help regain control of finances.”
Our Debt Management Plan starts with a free and confidential credit counseling session. This credit counseling session can be done online (most popular method), over the telephone, or in person at one of our many locations. During the counseling session, a certified credit counselor will go over your income, assets, liabilities, debts, etc. and create a realistic budget and spending plan for you. You will receive your custom Action Plan that lists suggestions, tips, resources, and useful links to help you get out of debt and manage your money better.
If it is determined that you have a shortfall, but enough income to pay back your debts, you could qualify for a Debt Management Plan, if you so choose. Once you have your budget, Action Plan, and know exactly what’s going on with your finances you’ll be able to make the best informed decision for yourself.
If you decide to go on a Debt Management Plan, you’ll be required to fill out some paperwork and then we can send proposals to your creditors, and be your personal activist throughout the entire process. Your certified credit counselor will work closely with your creditors, identifying opportunities to relieve your financial burden, by possibly lowering your interest rates and waiving any late and/or over-the-limit fees.
Once you’re in the debt management program, you will then be able to make one simple monthly payment to Advantage CCS. This payment will be disbursed automatically to your creditors in the agreed-upon amounts every month. A Debt Management Plan is just another name for a “structured repayment plan.” A Debt Management Plan can get you out from under your unsecured debts in as little as 3 to 5 years, instead of 10 or even 20 years if you were doing it on your own.
A Debt Management Plan can save you time, money, and give you peace of mind. It’s still important to regularly be in contact with your credit counseling agency and send them copies of your bills every few months. This helps the credit counseling agency keep track of what is being posted to each billing cycle by each creditor and make sure mistakes don’t happen. The counseling agency does not get your bills sent to them by the creditors, so it’s up to you to send these in every few months.
Other than regularly contacting the credit counseling agency, sending in your monthly payment each month, and sending copies of your credit card bills every few months, there is not much left to do, but watch your debt shrink. As your debt begins to shrink, your credit score should start to increase because your creditors are getting paid every month and on time. You’ll be debt-free before you know it and have less stress in your life.
If you’d like to discuss a Debt Management Plan with a certified credit counselor, give us a call today at 866-699-2227 or visit us online at www.advantageccs.org, and we’d be happy to answer any questions you may have. We are always here to help!