A Debt Management Plan or DMP is the usual solution that comes to mind when people think about how to deal with their debt.
The DMP is really a plain vanilla or generic solution and all for-profit or nonprofit credit counseling or debt counseling groups, including Consumer Credit Counseling Services (CCCS) offer just about the exact same product. And a product it is.
Don’t be fooled into thinking that a debt management plan involves any sort of negotiation with your creditors, it doesn’t. The DMP is really managed and dictated by the creditors. They call the shots, they tell the debt management companies what terms the creditors will offer for people in a DMP.
The credit counseling group makes money off of you when you are in a debt management plan. They get a percentage back from the creditor for collecting money from you and it is in their best interest to put you into a debt management plan so they can make money.
Debt Management Plans Are Not Designed for You to Get Out of Debt
Since the DMP terms are really dictated by the creditors a debt management plan is not really designed to get you out of debt.
A true get out of debt plan would be created using your circumstances as the starting point and then crafting a plan to allow you to get out of debt from your starting point.
The DMPs of today, with creditor dictated terms, doesn’t work like that. It tries to get you out of debt using what the creditor wants as the starting point.
Recent Comments