Debt Management Plans: Defining DMPs

Posted by: Sally S. | Dec 24,2007

This week we’ve been talking about debt management plans (DMPs) on the Credit Bloopers blog. DMPs become a blooper when they’re used for the wrong reason or when you get into the wrong kind of plan. Learn more about debt management plans from credit counseling services before you agree to use one to pay off your credit card debt:

 

Before you sign up for a DMP, make sure you’ve exhausted all over your other options. You will need to have a long-term money management and budgeting strategy that goes beyond a debt management plan once you get out of credit card debt in order to stay out of debt in the future.

 

Find out how the credit counseling service plans to structure your DMP. You want a DMP that makes sure your bills are paid on time each month. You need a debt management plan that’s working for you- and you need to see the plan in writing before you sign any agreement.

 

Make sure your credit counseling service explains exactly what is and what is not covered by the debt management plan. Not every credit card debt will fit into a DMP. You’ll need to know exactly which ones won’t be paid by your debt management plan to factor the extra payments into your budget. 

 

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