Debt Management Program
If you elect to join a DMP, your creditors will close your accounts and restrict the accounts for future charges. This can help you consolidate your debts into one monthly payment, which is often far less than the total you would be paying for all your loans combined. Credit card companies will often allow someone in a DMP to pay a lower payment, which can usually create a reduction of 10-20%, but could be as high as 50% if the situation warrants it.
If you join a DMP, it can lower the interest rate you pay on your card substantially. Some reports have show than a consumer in a DMP will be charged 5-10% by their credit card company instead of up to 30%. This may help you pay off your debts in 3-6 years depending upon your total debt and your income level.
Another benefit available is the opportunity to bring delinquent accounts current. You may have had a number of credit cards or personal loans go into default, but a credit counseling program can help you bring those accounts current which will ultimately help you improve your credit rating. After joining at DMP and making consecutive payments for three months or more, the creditor could reset the account reflecting a current status to credit rating agencies such as Equifax. This may help to get better interest rates on future loans and credit cards.
All of this can help you pay off your debts, improve your credit score in the long term and avoid having to file for bankruptcy. Each of these is a very good aspect of credit counseling, which may be your best debt resolution option.
There has been some criticism of credit counseling. For example, some credit counseling agencies actually had creditors on their boards in the 1980′s and 1990′s which led to a number of lawsuits. These agencies could get their income from creditors, and they can be beholden to the companies, which creates a conflict of interest. The Federal Trade Commission (FTC) has filed lawsuits against several credit counseling agencies over the years and urges caution when using certain agencies.
A debt management program, or DMP for short, creates a process where your creditors close your accounts and restrict the accounts for future charges. Debt management can be a long process, but it helps you eliminate your debt without declaring bankruptcy. A DMP is also not debt consolidation, because you are not taking out a loan to pay off your debts, you are working with a company like Consolifi to help pay down your debts.
In a DMP, Consolifi will negotiate lower balances and interest rates with your creditors, allowing you to pay one low monthly payment. The benefit of working with our company is that we are a performance-based debt resolution company. This means that instead of paying an upfront fee, we don’t get paid unless your debt is paid off to your liking. Our process is compliant with Federal Trade Commission regulations, and we are approved by the American Fair Credit Council.
Consolifi can help lower your credit card interest rates, which will lower the total amount of debt you owe. Even a drop of 5% can help lower your credit card debt substantially, and Consolifi has a long track record of success in getting interest rates dropped even lower. A DMP can help you bring delinquent accounts current and lower the primary balance of some of your debts, allowing you to pay them off in 3-6 years in most cases.
If you’re interested in credit counseling, call Consolifi today at 888-425-7594 or fill out our easy online debt consolidation application. We are FTC compliant and AFCC approved. With a performance-based approach, if we don’t resolve your debt to your liking, you don’t pay.