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How will a Debt Management Plan help me?

A Debt Management Plan (DMP) is a mutual agreement between you and a debt relief organization. Simply put, you agree to repay your unsecured debts in full over time, without taking on any more debt. In return, most creditors will agree to significantly reduce your interest charges eliminate future late and over-the-limit fees. This Plan is dramatically different from a Settlement Plan.

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How will a debt consolidation program help me?

Debt Consolidation is a widely-used term to describe debt repayment plans* that allow you to combine your monthly payments to your creditors into one monthly payment, often combined with lower interest rates and other creditor benefits, to get you out of debt as quickly as possible.

There are really two types of debt consolidation plans available in order to provide these benefits – a Debt Management Plan or a Settlement Plan. Both plans feature the benefits of a combined monthly payment, but the way they reduce your debt is quite a bit different.

Determining which plan is right for you really depends on your specific situation including the type of debt you have, your income and ability to make consistent payments, and what you agree is affordable.

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How will a debt settlement plan help me?

A Settlement Plan is an alternative to bankruptcy for those who want to pay back at least a portion of their debt, but cannot afford to fully repay their debt on their own, or through the Debt Management Plan. On a Settlement Plan, your monthly payments are held in a protected escrow account while negotiations take place with your creditors for a less-than-full repayment.

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Will a debt relief plan stop collection calls?

This depends on the type of plan that you enroll in. With the Debt Management Plan, collection calls usually stop after the third consecutive payment. If you continue to receive collection calls after your creditor has posted three consecutive payments, please contact us by e-mail with the name of the creditor and the last four digits of the account number to allow us an opportunity to investigate.

If you are enrolled in the Settlement Plan, collection activity, including calls, is likely to increase until settlements occur. This is to be expected, because monthly Plan payments are being deposited into your protected escrow account, rather than being sent to your creditors every month. Once a settlement occurs with a creditor, all collection activity will stop. It is important to understand this difference when enrolling in the Settlement Plan.

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How will a debt management plan affect my credit?

The Debt Management Plan, which is different from a Settlement Plan, provides important benefits to help your situation by allowing you to pay back your debt much faster than you could on your own. The Plan typically includes creditor benefits such as reduced interest rates, eliminated late fees, and the end of collection calls. We cannot make any assurances about the state of your credit or credit score, given this is beyond our control and outside the scope of the Plan. While there is nothing that can be done to immediately fix a bad credit profile, by making consistent monthly payments over time, a person may be able to improve their overall credit profile and creditworthiness.

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