debt management

This program is for clients who are not in default and want to preserve their good credit. This is a creditor approved program where credit cards are consolidated, interest rates are reduced, and FICO / Credit Score(s) are not affected.

Debt Management Plan

Here at JustUsDebt we offer a DMP (Debt Management Plan) that helps people become debt free in 3- 5 years. This is achieved by creditors offering lower interest rates through the DMP and requiring the same payment amount from the 1st payment until completion. By negotiating lower interest rates with their existing creditors this allows much more of their payment to be applied to the principle instead of the majority of their payment being eaten up by the interest & late fees. The client ends up becoming debt free in a fraction of the time they would have otherwise. The clients accounts would be closed by the creditors, and it is not recommend that they pursue any additional credit or financing for the first 12 to 24 months.

How Does it Work?

What is a Debt Management Plan? A Debt management, by the standard financial definition, involves a designated third party assisting a debtor with repayment of his or her debt. Debt Management Plans (DMP) are designed to help people with heavy debt and high interest rates get their financial situation under control. A simpler definition of a DMP is a structured repayment plan set up by a designated third party as a result of personal initiation. A debt management plan entails a series of steps, which the third party service works on with the help of the debtor. The first step typically involves compiling a list of all creditors and the amounts owed to each. Some creditors are not eligible to be included in a debt management plan, and typically, secured debt such as car loans and home loans are not included. Here are some of the requirements and guidelines for a consumer to participate in a DMP.

  1. Clients need a minimum of $3,000.00 of current debt. (not in collections or old utility bills) There must be enough debt to make the program beneficial for the consumer. You can add old utility bills to current debt over $3,000.00, just remember that there will be no benefits, we will just act as a paying agent.
  2. For accounts that have been in collections for 30-60 days (when the first creditor payment is made) we will attempt to get proposals accepted, there is no guarantee of acceptance because they are in collections.
  3. Accounts that have been in collections for longer than 60 days have a very low percentage of being accepted. Therefore, we will make every attempt to get a proposal accepted, collection accounts have a very low percentage of being accepted.
  4. All accounts need to be open for a minimum of six to nine months before they can have a proposal sent to the creditor to receive benefits. If a consumer has an account that is younger than six month, we can act as a paying agent until the account is mature enough to send a proposal.
  5. Interest rates should be above 18% and the consumer is only making minimum payments. Remember this is a hardship program and the full benefit of the DMP is that a consumer can get debt free in 3-5 years by making the same payment each month at the reduced interest rates set by the creditors. This does not mean that their payment will be lower or all creditors will reduce their rate of interest.
Program Stipulations:
The accounts will be closed by the creditors. If you have more than one account with the same creditor, the other account(s) will also be closed. It is recommended that you do not pursue any new credit or financing for the first 12-24 months in the program. A consolidation program is not a loan. Some creditors do not participate in or offer benefits in a DMP. For example Dell and American Express are two creditors that do not participate. If current accounts that are enrolled in the program are not kept current until we receive the 1st full creditor payment, client will receive late fees and may receive phone calls and letters until all negotiations are finalized (approximately 90 days). Quoted monthly payment is a good faith estimate based on the information provided by client and may change when proposals are sent to the creditors. Missing a scheduled payment while in the program may be grounds for creditors to drop a client from the program. Creditors retain the right to state that clients are in a DMP on their credit report. Upon successful completion, Creditors may report program completed. There is an administrative fee built into your monthly payment and will vary by state.

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