Personal Debt Management

Many people who opt for a DMP to repay their unsecured debt are prompted to seek help after late payments have caused their credit card interest rates to soar. In some cases, a DMP is a sound alternative to bankruptcy. Ultimately, the plan serves the dual purpose of helping consumers repay their debts and helping creditors receive the money owed to them.

“Many consumers are deciding to take control of their financial lives by working with their creditors to pay down their debt, even if it takes 36 months or longer,” said Vicki Williams, vice president of Debt Management Plan Services for CredAbility. “They realize that this is a more responsible way to reduce debt and rebuild their credit compared to debt settlement or debt consolidation services offered by for-profit companies.”

A Debt Management Plan (DMP) helps consumers who are struggling with credit card debt develop reduced payment programs with creditors. Many creditors offer favorable repayment terms to consumers who enroll in a DMP, including interest rates ranging from 6% to 10% on their credit card debt. These creditors may also eliminate late fees and penalties once a consumer enrolls in a DMP with a nonprofit credit counseling organization.

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