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Consolidating Debt
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Debt Management Plan
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 (DMP). DMPs are not for everyone. You should sign up for one of these plans only after a certified credit counselor has spent time thoroughly reviewing your financial situation Even if a DMP isn't appropriate for you, a reputable credit counseling organization still can help you create a budget and teach you money management skills. With a DMP, you make monthly payments to the credit counseling agency, which in turn forwards those funds on to your creditors to pay your unsecured debts, like your 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 or waive certain fees, but check with all your creditors to be sure 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 more to complete. Ask the credit counselor to estimate how long it will take for you to complete the plan. You may have to agree not to apply for — or use — any additional credit while you’re participating in the plan.
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The purpose of this site is to provide general information about issues involving consolidating debt . This site is not intended to substitute for professional financial or legal advice but instead is a general interest site where people can learn more about issues involving the subject matter. Copyright 2006 Consolidating Debt |
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