What is a Debt Management Plan?
A debt management plan is also referred to as a DPM, which is practically self-negotiation.
Usually, people who have debt will write to creditors, explaining their situation and trying to negotiate a proper payment plan. With a debt management plan, this isn’t necessary, because you won’t have to deal with creditors at all.
If you have a debt management plan, there is a professional specifically assigned to you that contact your creditors and pay them in full, allowing you to pay only the relevant debt management company, one amount.
It will help you cope with debt better, as you now won’t have to stress about whether you can afford your bills and expenses each month. The DPM structured plan will allow you to have peace of mind and overall reduce stress, as well as diminish those awful calls from creditors are known to make threats to you. A DPM will only pay for unsecured debts that aren’t guaranteed against your personal property.
What Else You Need to Know About a Debt Management Plan
- You must be able to make payments of the same amounts to a debt management company each month. You can never skip a payment or reduce the amount you’d like to pay.
- DPM’s don’t legally bind you to their company, which means you can stop using their services any time you like.
- By making use of DPM’s, it’s important to know from the start that debt cannot be written off. If you have a lot of debt to pay back, DPM’s will only simplify the process of you paying back the debt.
- DPM’s will affect one’s credit rating because you’re making reduced payments, showing you’re not able to pay the full amount of your debts.
Although there are many companies, apart from DPM’s, that will help manage your debt, DPM is one of the few that doesn’t charge you to manage your debt.
Since you’re looking to manage your debt, chances are you don’t have money lying around to pay for a debt management company’s services at all, which is why DPM’s are the best option for you. There are also many DPM’s to choose from, all of which can be found online.
Need help with debt? Credit Matters is a debt counseling company that can help you reduce your debt.