Debt Management Plan (DMP)

A debt management plan is a debt repayment plan worked out by a credit counseling agency. A credit counselor negotiates your payment terms with your various creditors. This negotiation often results in more favorable terms, such as more time to repay, reduced interest charges or waived fees. You then make a single monthly payment to the credit counseling agency, who distributes those charges to your creditors. Note that, even though many credit counseling agencies are not-for-profit, there is often a fee to cover the cost of administering these plans.