DMP Questions to Ask
- Is a DMP the only option you can offer me?
- Will you provide me with on-going budgeting advice, regardless of whether I enroll in a DMP? If an organization offers only DMPs, find another credit counseling organization that also will help you create a budget and teach you money management skills.
- How does your DMP work?
- How will you make sure that all my creditors will be paid by the applicable due dates and in the correct billing cycle? If a DMP is appropriate, sign up for one that allows all your creditors to be paid before your payment due dates and within the correct billing cycle.
- How is the amount of my payment determined?
- What if the amount is more than I can afford? Don’t sign up for a DMP if you can’t afford the monthly payments.
- How often can I get status reports on my accounts?
- Can I get access to my accounts online or by phone? Make sure that the organization you sign up with is willing to provide regular, detailed written statements about your account.
- Can you get my creditors to lower or eliminate interest and finance charges, or waive late fees?
- If yes, contact your creditors to verify this, and ask them how long you have to be on the plan before the benefits kick in.
- What debts are not included in the DMP?
- This is important because you’ll have to pay those bills on your own.
- Do I have to make any payments to my creditors before they will accept the proposed payment plan?
- Some creditors require a payment to the credit counselor before accepting someone into a DMP. If a creditor counselor tells you this is so, call your creditors to verify this information before you send money to the credit counseling agency.
- How will enrolling in a DMP affect my credit?
- Beware of any organization that tells you it can remove accurate negative information from your credit report. Legally, it can’t be done. Accurate negative information may stay on your credit report for up to seven years.
- Can you get my creditors to “re-age” my accounts – that is, to make my accounts current?
- If so, how many payments will I have to make before my creditors will do so? Even if your accounts are “re-aged,” negative information from past delinquencies or late payments will remain on your credit report.
- A DMP is often sold as a way to avoid bankruptcy. This may be true for you IF a DMP is right for you.
- Bankruptcy is not necessarily to be avoided at all costs. In many cases bankruptcy may actually be the best choice for you. Bankruptcy is discussed later.
- If you sign up for a DMP that you can’t afford, you may end up in bankruptcy anyway, and you may well end up in a worse position.
On to the next section!