5 Lesser-Known Facts About Debt Management Plans
But there's another path that's often overlooked — one that offers structure, support and less impact to your credit. A Debt Management Plan (DMP) could be the financial lifeline that makes it possible to tackle debt with confidence, clarity and consistent progress.
'Debt Management Plans are one of the best-kept secrets in the world of debt relief,' said Manuel Salazar, chief executive officer at Take Charge America, a national nonprofit credit counseling and debt management agency. 'They're designed to help consumers regain control of their finances without the long-term financial damage that can come with other strategies.'
Salazar sheds light on five need-to-know facts about DMPs:
They don't wreck your credit. Unlike bankruptcy or debt settlement often does, enrolling in a DMP won't tank your credit score. In fact, making consistent, on-time payments through a DMP can actually improve your score over time.
You get free, ongoing financial guidance. A DMP is more than just a payment plan. Consumers receive personalized budgets, one-on-one support and ongoing guidance to build better long-term financial habits throughout the plan.
They require one simple monthly payment. DMPs consolidate multiple credit card payments into a single monthly payment, with no new loan required. Your credit counseling agency works directly with your creditors, distributing payments on your behalf and removing the burden of managing multiple bills.
Collection calls stop. Once you're enrolled in a DMP and creditors begin receiving regular payments, those stressful collection calls and letters typically come to a halt — giving you some welcomed breathing room.
They're only available through nonprofits. Nonprofit credit counseling agencies are the only organizations that offer DMPs, which means the guidance and support you receive will always be focused on your best interests instead of profit margins.
'People often wait until they feel completely overwhelmed to ask for help,' Salazar said. 'But it's important to know you don't have to hit rock bottom. A DMP can be a proactive, empowering step toward financial freedom.'
To start your path toward a debt-free future, work with experts to create a personalized DMP.
About Take Charge America, Inc.
Founded in 1987, Take Charge America, Inc. is a nonprofit agency offering financial education and counseling services including credit counseling, debt management, housing counseling and bankruptcy counseling. It has helped more than 2 million consumers nationwide manage their personal finances and debts. Learn more at takechargeamerica.org or call (888) 822-9193.
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