| Debt management plans (DMP) consolidate your | | | | question to ask is how long will it take to pay off |
| short term debts into one monthly payment. | | | | your accounts. A reputable company will ask for |
| They also negotiate lower interest rates, enabling | | | | lenders names and account balances, but not |
| you to pay off your accounts usually in less than | | | | account numbers to make an estimate. |
| five years. Before you sign up with one of these | | | | They will then give you a specific date for each |
| companies, you want to investigate them to be | | | | account. Since you have varying account balances, |
| sure they are legitimate. | | | | each account will have a different date. You |
| Services Offered | | | | should also know that rates are predetermined by |
| A DMP company, also called debt consolidation, | | | | creditors, so all DMP companies will get you the |
| handles the accounting side of your bills. They | | | | same low rate. |
| work with your lenders to lower interest rates, | | | | You should also ask about fees. Most companies |
| pay your accounts, and then close accounts when | | | | charge a small fee for each account handled. |
| appropriate. | | | | Companies that require a large fee up front that |
| DMP are for short term debt, like credit cards and | | | | is refundable in part are banking on the fact that |
| bills. They cannot reduce student or mortgage | | | | most people do not follow through with these |
| rates. However, you can reduce rates on these | | | | plans. |
| types of loans by refinancing them on your own. | | | | Other Credit Services |
| With a DBP company, all you do is make one | | | | If you are not sure debt consolidation is for you, |
| payment to them and provide your financial | | | | sign up for credit counseling. Through an |
| information. Part of your monthly payment will | | | | appointment over the phone, internet, or |
| include a small fee for each account handled by | | | | in-person, you can work with a counselor to come |
| the debt consolidation company. | | | | up with a financial plan for debt payment. They |
| Questions To Ask | | | | may suggest a DMP or consolidation your credit |
| Before you submit your financial information to a | | | | into one loan, usually a second mortgage. |
| DMP, investigate the company. One important | | | | |