What is a Debt Management Plan (DMP)? The goal of this program is to reduce clients monthly payment to make it manageable for the individual. So, CCCS contacts each of clients creditors to determine the lowest possible acceptable payment and interest rate.
How do debts get paid off under a DMP? Each month, the client will deposit the agreed amount with CCCS. Then, CCCS disperses that money to the client’s creditors.
Is interest no longer charged on my credit accounts if enrolled in a DMP? A counselor will be able to determine if creditors will consider stopping interest charges. Most creditors do not stop interest, but many will lower interest.
Is it like debt consolidation? Each credit account remains separate; the client makes one monthly payment to CCCS that will cover all credit accounts. Then, CCCS will disburse the agreed amounts to each creditor.
How does debt management differ from debt settlement? Debt management is paying off the full balance by making monthly payments. Conversely, debt settlement is paying less than the balance, typically half the debt. Debt settlers cease communication with creditors while you continue to pay debt settler’s fees.
How long does it take to pay off? Counselors must provide a payout schedule for debts on a DMP that is no longer than 5 years. Therefore, clients take 2-5 years to pay off their DMP. However, they can pay off debt sooner by making extra payments.
Can troublesome bills go on a DMP? To be most effective in paying off debt, only unsecured debts are eligible for a DMP.
How will a DMP affect my credit? A DMP may impact your credit either favorably or unfavorably. In fact, changes in credit depend on the individual credit reporting policy of creditors in your DMP.
Does seeking DMP counseling get reported on a person’s credit report? CCCS does not report to credit reporting agencies or creditors that a client has come in for counseling.
Does CCCS take over my accounts? CCCS does not take over your accounts. Conversely, CCCS consolidates debts and works with creditors to reduce interest rates and monthly payments. However, you are still responsible for providing CCCS with information to continue to work with creditors.