Learn More about Debt Management Plans

Posted by: Sally S. | Dec 25,2007

This week we’re talking about debt management plans (DMPs) on the Credit Bloopers blog. Debt management plans are developed for you by a credit counseling service and help you pay off your debts when they’ve become out of control. What you need to know about debt management plans:

 

Some DMPs require that you make a payment before the plan goes into effect. This should always be the lenders or credit card companies that you owe requesting payment, not the credit counseling service. You can easily double check by contacting your credit card companies and lenders to see if they require a payment to start the DMP.

 

If your creditors aren’t requesting the payment, the credit counseling service you’ve selected may be trying to pull a fast one on you. Since a reputable credit debt counselor only charges customers a nominal fee, you shouldn’t have to pay a hefty down payment or pay a portion of what you owe your creditors to get your DMP started.

 

Credit counseling services cannot guarantee that your credit report will only show positive reports from creditors. If you have negative items on your credit report, most likely, they will stay there for seven years no matter what kind of debt management plan you choose. Certainly no credit debt counselor can remove negative items from your credit report, so be wary of one who claims this can be done.

 

Learn more about credit counseling on the Credit Nightmares blog.  

 

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