Considering a debt management program? Wondering what’s in it for you? A DMP helps you pay off debt in a way that’s favorable to you, providing many benefits you might not have otherwise.
To reduce your stress and save you the hassle of juggling bills, we combine your debt into a single monthly payment that we distribute to your creditors. Note: this is not a "bill consolidation" or "debt consolidation" program. Unlike these programs, a debt management program allows you to pay off all your debt without putting you in even greater financial danger. You can read more here about the differences between a DMP and bill consolidation.
By starting a debt management program, you show your willingness to pay off 100% of your debt. In return, many creditors are willing to help you out by reducing your interest rates and waiving late fees and over-limit fees. Many creditors will even mark your past-due account as "current" after they’ve accepted your DMP and received three consecutive payments. Different creditors offer different benefits, so your counselor will discuss the benefits your specific creditors offer during your free credit counseling session.
After your creditors agree to the terms of your program, your interest rates will be lower. This means that less of your monthly payments will go toward interest and more will go toward repaying your principal balances. This shortens the time it takes you to repay your debt. During your counseling session, you’ll get an estimate of how long it will take you to pay off your debt if you choose to start a DMP.
If you’re really behind on your bills you’re probably getting calls from aggressive and unpleasant debt collection agencies. These calls may continue for about the first 90 days of your DMP, while your creditors are processing and accepting our proposals on your behalf. However, during this time you may tell collectors that you’ve started our program, and you can put them in touch with our creditor relations department. Once the 90-day period is over, debt collection agencies usually stop calling you.
Because each situation is unique, the exact impact a debt management program has on a credit score will vary from person to person. But, because a DMP results in you repaying everything you owe without opening new lines of credit, it will lead to a better credit score in most cases. For details on how it works, check out this blog post.
Many see filing for bankruptcy as a last resort, either because they’re morally opposed to it, not allowed to by their employer, or don’t want to pay higher interest rates for the 10 years bankruptcy will show on their credit reports. Although bankruptcy may be an option to consider, a debt management program is often a better solution. Clearpoint’s counselors don’t provide legal advice, but will tell you whether they think consulting a bankruptcy attorney or starting a DMP is in your best interest.
During your debt management program, Clearpoint’s certified counselors are available to help you with your problems and concerns. Our counselors are invested in your financial health and will offer any advice and encouragement you need to keep you on track.
You’ll be comforted by having and following a program that will ultimately eliminate your debt. Prior to starting a debt management program, many of our clients find themselves struggling to get out of their stressful situation. A DMP helps you regain your confidence and control over your finances. As former client Jodi S. said: “Clearpoint took the stress out of my daily life.”
Of course, the primary goal of a debt management program is to help you become debt free. The DMP is a tool that, along with a budget and financial education, will help you get out of debt and plan a bright financial future.Read more about debt management programs »