Skip to content
United Settlement
  • Manage Your Debt
    • get-startedGet Started
    • settlementDebt Settlement
    • consolidationDebt Consolidation
    • debt-managmentDebt Management
    • bankruptcyBankruptcy
    • credit-cardCredit Card Debt
    • businessBusiness Debt
    • car-loanAuto Loan Debt
    • student-debtStudent Loan
  • Understand Your Debt
    • credit-cardCredit Card
    • business-2Small Business Debt
    • medicalMedical
    • loansLoans
    • umbrellaCredit Card Relief
    • interest-ratesInterest Rates
    • student-debtStudent Debt
  • Tools & Resources
    • faqFAQs
    • credit-cardCredit Guidance
    • calculatorCalculator
    • call-usContact Us
    • contact-usAbout Us
  • More
    • Debt Settlement
    • Debt Consolidation
    • Reviews
    • FAQs
    • About Us
    • Contact Us
    • Blog
    • Sitemap
    • Debt Relief by State
Professional Debt Relief Programs
Logo
United Settlement
phone icon 888-574-5454
client icon Client Log In
  • More
    • About Us
    • Reviews
    • Contact Us
    • Debt Settlement
    • Debt Consolidation
    • Debt Management
    • Business Debt Relief
    • Credit Card Debt Relief
    • Debt Relief by State
    • FAQs
    • Blog
    • Sitemap
Qualify For Debt Relief
Professional Debt Relief Programs
  • Manage Your Debt
    • get-startedGet Started
    • settlementDebt Settlement
    • consolidationDebt Consolidation
    • debt-managmentDebt Management
    • bankruptcyBankruptcy
    • credit-cardCredit Card Debt
    • businessBusiness Debt
    • car-loanAuto Loan Debt
    • student-debtStudent Loan
  • Understand Your Debt
    • credit-cardCredit Card
    • business-2Small Business Debt
    • medicalMedical
    • loansLoans
    • umbrellaCredit Card Relief
    • interest-ratesInterest Rates
    • student-debtStudent Debt
  • Tools & Resources
    • faqFAQs
    • credit-cardCredit Guidance
    • calculatorCalculator
    • call-usContact Us
    • contact-usAbout Us
  • More
    • Debt Settlement
    • Debt Consolidation
    • Reviews
    • FAQs
    • About Us
    • Contact Us
    • Blog
    • Sitemap
    • Debt Relief by State
United Settlement » Debt Management » How Does Debt Management Plans Work?
admin January 27, 2018

How Does Debt Management
Plans Work?

For individuals burdened with high levels of unsecured debt, enrolling in a Debt Management Plan (DMP) can prove highly beneficial. A DMP is a structured program designed and managed by a credit counseling agency that works on your behalf to negotiate lower interest rates and monthly payments with your creditors. Instead of having to keep track of and make multiple monthly payments to a variety of different creditors, a DMP allows you to make one streamlined payment to your counseling agency, who then submits appropriate disbursements to creditors according to the terms structured in the DMP. Why do creditors allow for such concessions? Because a DMP allows banks to collect on accounts that might otherwise reach charge-off status and become worthless to them.

Get The Ball Rolling With a Reputable Credit Counseling Agency

Begin by choosing a reputable counseling agency staffed with certified counselors who are trained in debt management. Be prepared to discuss specifics related to your income and expenses. In other words, know exactly how much money you have left over at the end of the month after accounting for basic necessities such as rent, food, transportation, utility bills, etc. You should also be able to discuss a clear picture of your unsecured debt situation. Therefore, you should know exactly how much you owe on all of your individual credit cards, their respective interest rates and minimum monthly payments, as well as any outstanding medical bills and other personal financial obligations. These debts will all be discussed in an interview with your credit counselor, who will refer to your credit report to verify that all of the information you provide is accurate.

A reputable credit counselor will make recommendations related to controlling your expenses and enhancing income while also offering free educational materials that can further get you on the right track financially. After evaluating your situation, the counselor can offer you a debt management plan that includes a reduction of interest rates and monthly payments on your unsecured debts – subject to the acceptance of your creditors. If you agree to enroll, the duration of the payment schedule will generally be between 36 and 60 months. Most counseling agencies charge a one-time enrollment fee and regular monthly fees of approximately $50 per month for services related to a DMP.

debt-management-plan

I've Just Enrolled in a Debt Management Plan. What Happens Next?

Following enrollment in a DMP, you begin making consistent monthly payments directly to the counseling agency, who properly allocates funds to your creditors. Your payment will be conducted automatically and electronically, directly from your bank account to the counseling agency, to ensure timely payments to your creditors. You receive monthly statements from the counseling agency and your creditors and compare them for accuracy. Aside from the benefits of lower interest rates and monthly payments, you can expect annoying collections-related phone calls to fade into memory.

Meantime, all of your credit card accounts will get closed (with the possible exception of an “emergency” credit card remaining open) and you won’t be able to obtain new credit. Initially, your closed accounts will have a slight negative effect upon your credit score, although creditors do view enrollment as a willingness to pay off your debts.

However, it would be a terrible idea to pursue new credit while enrolled in a DMP, as creditors can learn of any applications for new credit by viewing your credit report and rescind the benefits that were put into place through the DMP. Instead, just focus on making regular timely payments to your counseling agency for the duration of the plan.

Remember, only unsecured debts are eligible for inclusion in a Debt Management Plan – in other words, secured debts such as mortgages, Federal student loans, home equity lines of credit and auto loans cannot be consolidated into a DMP. However, credit card debts, personal loans and medical bills are all eligible. Also, you don’t have the option to cherry-pick among which unsecured debts you include – all eligible unsecured debt will likely be accounted for and included in your plan, not just your “problem accounts.”

Stick to Your Debt Management Plan

As you make consistent monthly payments, you can expect a gradual recovery in your credit score, which will eventually be generously rewarded upon full payment of all debts. For this reason, always make your monthly DMP payments to your counseling agency in a timely manner. If your circumstances change for the worse while you’re enrolled in a DMP, just inform your counseling agency and they can work with you to restructure payment levels accordingly.

You should expect the debt management plan process to take three to five years to complete. However, given the benefits of lower interest rates and lower payments, along with the simplicity of making just one consolidated monthly payment, debt management plans offer an appealing solution to the problem of excessive unsecured debt. Imagine relieving the stress of your debt burden while strengthening your credit profile and ultimately enjoying the peace of mind of a debt-free lifestyle. These are the benefits you can look forward to when you complete a debt management plan.

How Debt Management Plans Work

Excellent
Based on 356 reviews

Overall 4.4 out of 5 stars

View All Reviews
December 28

Time and again, I did not know how to handle my debt

Time and again, I did not know how to handle my debt. Even when I paid my credit cards off, a few months later I was back in the same situation. But this year is different. I contacted United Settlement to see if we could work...

Buddy Ewing
December 27

Business debt relief is what I needed when I contacted the United Settlement crew

Business debt relief is what I needed when I contacted the United Settlement crew. They are committed to helping people like me who requires more help with business debt problems. I had several loans out for my deli, and these...

Lianne Finnegan
December 26

Student loan debt was the reason that I reached out to United Settlement

Student loan debt was the reason that I reached out to United Settlement. I had about 200K plus in student loan debt for my business degree. I recognized that I had to do something when I struggled to make the $1,000 student loan...

Wren Herrera
December 20

There is nothing worse than falling ill and then having to deal with super expensive medical bills

There is nothing worse than falling ill and then having to deal with super expensive medical bills that you really do not have the patience or experience to handle. I was pleased with my experience with United Settlement. They...

Jardel Shah
December 14

I took out a few personal credit cards to open my boutique

I took out a few personal credit cards to open my boutique. When than money ran out, I went on to take out more loans for my business. However, this quickly turned into a disaster. Today, I now have a mountain of debt without a...

Iain Holt
December 12

Who knew that auto loans were so negative for your credit lines

Who knew that auto loans were so negative for your credit lines? Especially, if they are not paid off right away. As a married couple, we had vowed to keep auto loan debt at bay. But, we found ourselves in a situation where we...

Avaya Adkins
December 07

I didn’t have a ton of debt when I contacted United Settlement

I didn’t have a ton of debt when I contacted United Settlement, but what I wanted from them was some information about how to handle my debt management. I knew that I needed some more information to get my business and personal...

Lucien Rojas
December 04

Federal student loans were the reason I ended up at United Settlement

Federal student loans were the reason I ended up at United Settlement. I had about $200K to pay back and I was not quite sure where to tackle that debt once I got out of school. But I reached out to that company and they provided...

Madiha Matthams
December 03

Everyone knows how horrible student loans are

Everyone knows how horrible student loans are. For me and my family, they had become more than just an annoying monthly bill. They had taken over our lives. That’s why I decided to take action and find a company like United Settlement...

Asim Horner
December 03

I wanted to be more informed about my own personal and business debt

The number one reason I chose to contact United Settlement was I wanted to be more informed about my own personal and business debt. When you have credit card debt, it can be extremely frustrating. Especially if you don’t know...

Frankie Mckee
November 29

I cannot believe I was finally able to find a company to actually help me pay off my debt

I cannot believe I was finally able to find a company to actually help me pay off my debt! I thought I would forever be chained to debt. But United Settlement offered me multiple solutions for paying off short- and long-term debt....

Justine O'Ryan
November 21

What your money can do for you.

The great reviews that you have thanks.

Jerry Conley
November 19

Dealing with high interest auto loan debt was difficult for me and my wife

Dealing with high interest auto loan debt was difficult for me and my wife. We thought we got a good deal, but it actually was a horrible loan. So, we reached out to United Settlement, and they got to work creating a debt repayment...

Cathal Brett
November 12

No one really wants to go bankrupt, and neither did my family

No one really wants to go bankrupt, and neither did my family. But fortunately, we did not have to go that route. It was our last resort, but United Settlement helped us figure out a way around bankruptcy for good. They gave us...

Aliesha Ward
November 08

I had been through about 5 different credit counseling agencies before I found United Settlement

I had been through about 5 different credit counseling agencies before I found United Settlement. I had read through their reviews and made the decision to move forward with them. I also was so impressed by their free information...

Filip Rosas
November 07

Save time and money

Just what I needed, already had a company I was working with and I switched because I was able to same some money. Brian and Alfred were really nice and helpful

Susanna Fasenmyer
November 07

As a business facing some unwanted financial difficulties

As a business facing some unwanted financial difficulties, we were at a loss for what to do next when our debt started to soar. We took a closer look at our financial situation by contacting United Settlement. These guys were very...

Warren Hutchinson
November 02

I had no clue how to create a debt management plan

I had no clue how to create a debt management plan and in fact, I didn't even know what a debt management plan was. Fortunately, I reached out to United Settlement before I had too much debt to tackle. I was so pleased with the...

Bobbi O'Quinn
October 31

Being burdened by debt is one of the biggest struggles we faced as a family

Being burdened by debt is one of the biggest struggles we faced as a family. But these people at United Settlement were very helpful in deciphering the different debts we had and then coming up with a debt consolidation planned...

Dawn Mercer
October 29

Student loan debt was my worst enemy before I ran into United Settlement

Student loan debt was my worst enemy before I ran into United Settlement. I really thought I would just have terrible credit for the rest of my life because I will never get out from underneath it. It was so stressful of an experience....

Forrest Guest
  • Contact Us
  • 241 West 30th Street
    3rd Floor
    New York, NY 10001
  • (888)-574-5454
  • [email protected]
  • Privacy Policy
  • Terms & Conditions
  • Debt Relief Services
  • Debt Settlement
  • Business Debt Relief
  • Credit Card Help
  • Debt Consolidation
  • Debt Management
  • Student Loan Help
Learn more about debt relief


    • facebook
    • Google Plus
    • Twitter
    • YouTube
    • Instagram
    • Linkedin
    • facebook
    • Tools & Resources
    • Contact Us
    • About Us
    • Blog
    • Debt Calculator
    • Frequently Asked Questions
    • Sitemap
    • Reviews
    • Client Login
    Free Savings Estimate
    Apply Here
    Clients who stay according to debt relief program can realize approximate savings of 50% before fees, or 30% including fees, over 12 to 48 months. All claims are based on enrolled debts. Not all debts are eligible for enrollment. Not all clients complete our program for reasons such as: their ability to save sufficient funds. Estimates based on prior results, which will vary based on specific circumstances. We do not guarantee that your debts will be lowered by a specific amount or percentage or that you will be debt-free within a specific period. We do not assume consumer and/or business debt, provide tax, bankruptcy, accounting, legal or credit repair services/ advice. Our program is not available in all states. Please contact a tax professional to discuss tax consequences of settlement. Please consult with a bankruptcy attorney for more information on bankruptcy. If you have any additional questions please contact us.
    Copyright 2020. United Debt Settlement, LLC