What is a debt management plan?
Published by admin on November 25, 2009
What is a debt management plan?
Here is another article taken from wikipedia about what does debt management plan means:
A Debt Management Plan (DMP) is a method used in various countries for paying personal unsecured debts (which typically have gotten out of control in the sense of payments due taking too large a portion of income, or even exceeding it) that involves cataloguing all the debts, assessing income and budget, and re-negotiating interest rates and payments with the lenders, based upon evidence that the result will be a higher likelihood of collection by the lenders.
A DMP is typically run by non-profit consumer credit counseling services that may be funded by creditors to collect and distribute money. In this model, repayment plans are developed by creditors telling the groups what the creditor requirement is and rewarding the group by paying them a percentage of funds collected from debtors and sent to creditors. This percentage of funds is often referred to as “Fair Share”. In recent years, creditors have significantly reduced or eliminated fair share payments. The result has been the creation of many for-profit services who do not accept fair share payments, but rather charge consumers a fee for their service.
After you’ve read this article, if you still have questions about what a debt management plan means you can feel free to ask us. And we will be more than happy to answer all your questions.
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