Are you currently overburdened with innumerable debts that you are thinking of getting help from a debt management plan (DMP) to help you get over the debt burden?
As a credit card debt woman who is now in a free debt management program, let me share with you what a debt management program is.
A debt management program, also known as debt management plan, is a program designed to combine all your existing multiple unsecured debt payments from credit cards, students loans, personal loans, and medical bills into one payment.
So instead of paying multiple payments to various creditors on different due dates, you make a single payment to the credit counseling company you sign up the debt management plan with. The credit counseling and debt management company is then in charge of distributing the debt repayment to all your creditors.
The consolidation of multiple monthly payments into one monthly payment usually results in lowering the total monthly payment previously paid and thus allowing you to continue to pay your debt with lower payments and reduced interest rates and most important of all, restore your credit score.
However before you enroll in a DMP, it’s important that you attend a credit counseling briefing first. To effectively use your time with a credit counselor, make sure you have certain pieces of information in hand before your first meeting.
If it is determined that a recommended budget is enough to help you get out of debt, your credit counselor will NOT enroll you in a debt management plan.
Beware of credit counselor that automatically signs you up with a debt management program! This means your debt management counselor does not have your interest at heart; he tries to make money from you through collecting fees.
A certified credit counselor will help put your debts and finances in order by helping you develop workable budgets and money management skills and pay off debts.
A debt management program, be it free or paid, is a debt relief option for you and your family when you feel that you have more creditors than you can handle and you are unable to make another month’s minimum payments for your credit card debt, student loans, and other personal and unsecured debt.
With the unemployment rate and consumer debt continuing to rise, the number of people seeking credit counseling services, enrolling in debt management programs or filing for bankruptcies is on the increase.