If you’re having problems repaying your debts on store cards, loans, credit cards, and many more, a debt management plan (DMP) might be the best option for you.
However, a debt management plan is only eligible for unsecured debts and some secured debts such as the following;
Types of debt for a debt management plan
- Most unsecured debts
- Personal loans
- Credit Union Cards like Alliant, Consumers, and Navy Federal
- Gas credit cards such as Wawa, Shell, Sunoco, and Exxon-Mobil
- In-store credit, home credit, or catalog debts
- Bank or credit union unsecured loans
- Store card or payday loans
- Airline or retail cards like Amazon, Delta, Target, Walmart, Southwest, and United
- Bank-issued cards like Citi, Chase, Wells Fargo, Capital One, or Bank of America
- Credit cards like MasterCard, Visa, Discover, or American Express
What Is a Debt Management Plan?
A debt management plan is a settlement plan between a debtor and a creditor that helps you (the debtor) to repay your debts with ease, at an affordable monthly reduced rate. Debt Management can also include several other options such as debt consolidation, counseling, and debt negotiation services.
Am I eligible for a Debt Management Plan?
To be eligible for a debt management plan, you need to meet some broad criteria. You’re eligible for a DMP if you’re finding it difficult to repay your monthly debts or have multiple creditors breathing down your neck. If you are suffering hardship and unable to meet debt obligations, we can help you.
If your situation looks like what is described above, this may be the right time to explore a DMP.
What types of debts cannot be included in a Debt Management Plan?
A debt management plan cannot be used to pay off secured debts like the following.
- Most Government or federal backed loans
- Energy and utility bills
- Rent, Mortgage, or loans secured against your home
- A court or federal fines and ongoing disputes
- Government fines
- Maintenance and child support
- Auto lease-purchase agreements
N.B: As a debtor, you need to understand that some creditors may not want to be a part of your debt management plan and it’s ok for them to do so. We can explore other options with these creditors such as consolidation or settlement and negotiation.
Does the Debt management plan affect my credit rating?
A DMP may lower your credit rating for a short time and it is because you will be paying your creditors less than what was originally agreed, and this fact will be displayed on your credit report. Over time you will gain any lost points as you are showing to be paying down your debt or settling them.
What are the benefits of a debt management plan?
As a debtor who is overwhelmed with debts, a DMP can offer some relief in the following ways;
Professional advice and support: Once you enroll for one of our DMP, you will get a debt counselor who will take a look at your debts, budget, and objectives and help you determine the best way forward. You can request a free savings estimate to see what you are likely to save through one of our debt management programs.
Lower payments and waived fees: Your debt counselor will negotiate on your behalf with your creditors to waive all previously charged fees and reduce your monthly payments so you can work with your budget and pay your debts quickly.
This will also help to stop creditor calls and letters as they will understand you are working on a plan to resolve debts.
Accountability: With a DMP, you’ll have a counselor who will ensure you stick to the laid down repayment plan and keep you accountable.
The bottom Line
If you’re struggling with debt repayment and don’t know what to do about your situation, you need to leverage the prowess of a debt management counselor to get your financial situation order and be debt-free.
Speak to a member of our team for a free no-obligation consultation and find out how we can help you.