After credit counseling, it may be recommended that you enter a debt management plan based on your situation; the counselor will propose an alternative payment plan to your creditors. The terms of a debt management plan typically involve the creditors agreeing to a lower interest rate, lower payments, and lower fees. To simplify your debt management, payments are consolidated and a schedule is determined.
Once the plan is agreed upon, the included credit accounts are closed and can no longer be used. You will make monthly payments to the counseling agency, and the agency disburses the money to each of the creditors. A debt management plan can last up to 5 years, and results in you becoming debt free without the damage to your credit that bankruptcy can bring.
“A Debt Management Plan is a way for individuals with overwhelming credit card debt to repay those debts faster and at a lower cost.”
For more information about debt management plans, visit our main site at ConsumerCredit.com
