What is a Debt Management Plan and how does it work?”
A Debt Management Plan consolidates all of your unsecured accounts into one monthly payment which is then sent to each of your program creditors. All of the accounts on the Debt Management Plan are closed or inactivated and a Debt Management Plan may impact your ability to open new types of credit while you’re on the program. Because a Debt Management Plan provides you the opportunity to repay your unsecured debts without taking on additional debt, many creditors are willing to provide benefits to help you pay off the debt and get back on track. Those benefits may include stopping late fees and/or over-the-limit fees, reducing or eliminating high interest rates and stopping collection calls or court proceedings. Debt Management Plans typically last three to five years and can help you reestablish a consistent payment history.
