DMPs (Debt Management Plans)

Debt Management Plans (DMPs) are structured agreements between individuals and their creditors, typically facilitated by a credit counseling agency. They aim to help manage unsecured debts—like credit cards—by negotiating reduced payments or interest rates. Under a DMP, the debtor makes a single, affordable monthly payment to the agency, which then distributes funds to creditors until the debts are paid off. This approach simplifies debt repayment, reduces financial stress, and helps individuals gradually regain control over their finances, all while avoiding more severe options like bankruptcy.