Credit Card Debt Relief with a Debt Management Plan

A Debt Management Plan (DMP) is an excellent way of achieving credit card debt relief. With rising unemployment, it is becoming increasingly difficult for American families to maintain monthly repayments. Choosing the right debt solution could help ease financial difficulties.

What is a Debt Management Plan?

A DMP is a method of putting all unsecured debts under one roof. The debtor then makes a single, monthly payment to creditors. Whilst there is no actual debt write-off, restructuring the amount owed can dramatically improve affordability. This leaves more money left over for essential household bills and secured debt payments.

A Debt Solution to Reduce Monthly Repayments

According to the U.S. Congressional Joint Economic Committee report called "Vicious Cycle: How Unfair Credit Card Company.", 14.7% of American families were using greater than 40% of their income to make debt repayments. These figures were from 2007, which was before the global economic downturn.



Stop Debt Collection Agencies
Whilst not a legally binding agreement, a DMP could mean that debt collection agencies no longer contact the debtor. Negotiations are normally performed by a private company or charity. Payments can be amended at any time; they must also be made punctually.

Clear Credit Card Debt

Whilst there is no debt write-off, many debt collection agencies and lenders will stop charges and freeze interest payments. Whilst this helps in terms of affordability, the lower payment may mean that it takes many years before becoming debt-free.

Whilst a Debt Management Plan will provide credit card debt relief, no actual debt is written-off. Consider other debt solutions, such as filing for bankruptcy or a debt settlement plan. Talking to a qualified debt counselor is advisable.

Sources

American Consumer Credit Counseling

Disclaimer: This article in no way attempts to provide legal, financial or tax advice. One should consult a licensed attorney, tax advisor, or other qualified financial professional before proceeding.