A DMP sets up a payment schedule for you to repay your debts. By voluntary agreement, you deposit funds with your credit counseling agency each month. They send those funds directly to your creditors. If collectors call, you can ask them to contact us.
You may also receive a reduction or waiver in finance and/or other charges. When you have completed your payments, we will assist you in reestablishing credit.
DMP serves the dual role of:
- Helping you repay your debt.
- Helping creditors to receive the money owed to them.
Your participation in a DMP may change information that is already on your credit report. If your credit report reflects that you have paid creditors as agreed in the past, a DMP could have a negative impact on a creditworthiness decision by a potential creditor, landlord, or employer because it is an indicator that you are or have experienced financial difficulties.
In addition, creditors may report that you are on a DMP and are not paying as originally agreed although they have accepted the reduced payment. Creditors have different credit reporting policies and a certified counselor can answer your questions about the possible effect on your credit rating.
But remember, the goal of the DMP is to develop a plan to ultimately improve your financial and credit standing.
If I enroll in a DMP, can I continue to use my credit cards?
No. As a rule, your creditors will close or suspend your lines of credit. In limited cases (for example if your employer requires you to travel) one credit card may be maintained.
When you complete the DMP, some creditors will reestablish your credit based on your current ability to pay and your payment history while enrolled in the plan.
Will being enrolled in a DMP stop interest from being charged on all accounts?
Your Certified Consumer Credit Counselor will be able to tell you if any of your creditors will consider stopping interest charges. However, the majority of creditors do not stop interest, but many lower the interest.
Can I have only the bills that are causing me problems in a DMP?
For the most effective and equitable treatment of your debts, we need to include all debts in your DMP.
SOURCE
No comments:
Post a Comment