What is a Debt Management Plan?

At Superior Debt Relief, it’s our goal to help our clients manage their debts and stabilize their financial foundations. One of the tools we use to accomplish this is a Debt Management Plan, or DMP. To that end, our debt counseling services and our agents work with our clients to help them design a DMP that is tailored to meet their specific needs, helping to balance their debt payments within their existing budget.

Various debt relief companies offer flashy means of getting out of debt and meeting those lofty obligations. But with a DMP, Superior Debt demonstrates how crafting a viable plan can work for you and your circumstance. If you still have questions, here are the key components of a DMP:

Repayment Duration

Most DMP’s will be set up to cover a term of between 36-60 months. The greater the debt a client carries, the longer the duration a DMP will be set up for in order to keep the monthly payments manageable.



Many creditors charge exorbitant fees for late payments. These add up and add to the principal an individual owes to their creditor. Often, these fees negate any payments that are made. A DMP can help reduce, and in many cases, eliminate these fees.

Interest Rates

One of the leading causes of spiraling debt loads are the interest rates that credit cards, hospitals, and other creditors charge customers who are late on their bills. It is not uncommon for these interest rates to exceed 20%. Thus, one of the primary goals of a DMP is to negotiate a lower interest rate with the creditor so that more of your payment is being applied to principal each and every month.




Consolidation

A DMP will combine all of your debts into one payment each month. This makes it easier to make the payments and stay on schedule. This goes a long way towards reducing stress, and it’s an effective way to mitigate the costs and fees incurred by missed payments to individual creditors.

Education & Counseling

Understanding your debt and obligations is crucial to keeping debt under control now and in the future. To that end, one component of a DMP is educating clients on everything from finance terms to ways to develop a household budget. Taken together, the educational component of debt counseling and a DMP is essential to avoiding a repeat of financial difficulties in the future.

The debt counseling services we offer at Superior Debt Relief can help you reign in your debt loads and get your financial future back on track. To learn more,