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What is a Debt Management Plan?

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What is a Debt Management Plan?

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A DMP is an informal agreement designed to allow a person who is struggling to meet their monthly debt repayments the opportunity to make a single more affordable monthly payment via a debt management company. In return for a management fee the company passes these payments to the debtors creditors until their debts are cleared. The most important part of the management companies duties should be to negotiate an interest and charges freeze on the debtors outstanding accounts and then regularly ensure that creditors continue this freeze during the term of the DMP. They should also ask creditors not to take any legal or recovery action providing the debtor keeps making their regular payments. Amongst their duties the management company also agrees to handle/reply to creditors letters and enquires. Learn more.

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Debt Management Plan (DMP) consolidates only unsecured debts. A consumer would still be responsible for negotiating terms with their secured creditors — such as a mortgage or auto lender. A DMP is not a loan. A standard DMP allows a consumer to consolidate all or most of their credit cards, medical bills and other unsecured debts into one monthly payment. Each unsecured creditor is different and some offer voluntary “concessions” such as lowering interest rates, re-aging a delinquent account, or waiving late and/or over-limit fees. These concessions, if offered, vary significantly from creditor to creditor.

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The Debt Management Plan (DMP) offered by Money Management International (MMI) and Consumer Credit Counseling Service (CCCS) is a confidential program individually designed to provide you with a unique solution for your financial situation. Our professional, certified counselors will assess your financial situation, assist in creating a spending plan, and negotiate the terms of your debts with creditors. By negotiating terms such as lower interest rates and waived late fees, MMI can often provide you with more affordable payments and a shorter payoff period. MMI will consolidate all of your unsecured debts into one convenient monthly deposit that will disburse directly to your creditors. Money Management International, and its family of agencies, has over 46 years experience in the credit counseling industry. We have helped tens of thousands of individuals and families get out of debt and regain financial stability and we can do the same for you. It is our corporate mission to lead cus

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A. A Debt Management Plan (DMP) consolidates only unsecured debts. A consumer would still be responsible for negotiating terms with their secured creditors — such as a mortgage or auto lender. A DMP is not a loan. A standard DMP allows a consumer to consolidate all or most of their credit cards, medical bills and other unsecured debts into one monthly payment. Each unsecured creditor is different and some offer voluntary “concessions” such as lowering interest rates, re-aging a delinquent account, or waiving late and/or over-limit fees. These concessions, if offered, vary significantly from creditor to creditor.

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A Debt Management Plan is a simple and effective way to pay your non-priority creditors. Your counsellor will calculate the amount you can afford to pay after giving consideration to your priority debts – mortgage, utilities, rates etcetera and day-to-day living expenses. Any money left is then deposited with us as a single monthly payment and then distributed to your non-priority creditors on your behalf.

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