Cost and Considerations of a Debt Management Program
To cover administration costs, non-profit credit counselling organizations charge a nominal fee for their repayment programs. Ours is a sliding fee scale (capped at $75 a month) and your counsellor will explain it to you in detail as you figure out your best option. Overall, a DMP will save you money because you pay much less interest and your payments are affordable to ensure your debt is paid off in a set time frame.
A DMP doesn’t change who your debts are with, but rather combines your monthly payments. It also reduces or eliminates the interest charged by your creditors going forward. If your DMP fails, your debt payments will return to how they were before the DMP started and in some cases penalties or interest from your creditors may apply. However, we don’t let anyone start a DMP unless we’re confident they’ll succeed. If your situation unexpectedly changes, then we’ll work to make a new plan and renegotiate with your creditors if needed. Whatever happens, we’ll support you every step of the way.
A DMP affects your credit report until two years after its completion. While this may not sound like good news, it’s far better than letting your debts keep your credit rating down indefinitely. The fastest path to reaching a stable financial future is to gain freedom from debt, and a DMP can be an excellent way to achieve this goal.