Debt Management Program
The purpose of a DMP is to get you back on track financially through regular and consistent payments, and allows you to pay down your debts within 3 to 5 years.
When you enroll in a DMP, you may receive the following benefits:
- Reduced monthly payments - Because DMP's were designed for financially stressed consumers, many times your creditor will allow you to make a smaller payment through Debt-Free America in order to free up some of your income for other important and necessary expenses.
- Fee waivers - If your account is past due and you are receiving fees, your creditors may offer a fee waiver. This means that while your account will still remain past due, until the past due amount is paid, your creditor will not charge you a fee for the past due amount. This will allow more of your monthly payment to get applied to your balance and assist in paying your debts off faster.
- Re-aging - If your account is past due, your creditor may provide a re-age instead of a fee waiver. Re-aging means that while the past due amount is still owed and part of your total balance, the amount is removed from past due status and your account is marked current. This can help increase your credit score, because your account is now current and you will continue to make consistent payments through your DMP.
- Interest rate reductions - Many creditors reduce interest rates charged, so that more of your payment goes to the balance rather than to the finance charges each month.
It is important to note that these benefits are determined by your creditors, and therefore cannot be guaranteed.
Many debts can be included in a DMP, including most types of unsecured debt such as credit cards, medical bills, department store cards, lines of credit, collection accounts and taxes. Secured debts such as your mortgages and car loans cannot be included in the program. All major creditors participate in consolidation programs. Banks, credit unions, many lending institutions, department store cards, hospitals, collection agencies and state and federal governments are just a few examples.
Please understand that during enrollment in a DMP, it is your responsibility to make consistent monthly payments and to stay in touch with us. Your participation is imperative in order for the program to work for you.