 TITLE: A Debt Management Plan: Is It Right for You? CONTENT: A debt management plan is a type of repayment plan that's set up and managed by a credit counseling agency. Many credit counseling agencies are nonprofit organizations that offer education and assistance to help people better manage their finances.\nWhen you work with a credit counseling agency, you'll meet with a counselor who will review your financial situation and help you understand your options. If a DMP is a good fit, the counselor can negotiate with your creditors on your behalf to create new payment plans.\nAs part of the negotiation, creditors may waive fees and lower the interest rate on your accounts if you agree to repay the debt through a DMP. With many DMPs, the goal is to have your debts fully repaid within three to five years, which is easier to do when less interest accrues each month.\nOnce you start the DMP, you'll make a single monthly payment to the counseling agency, which will then distribute the money to your creditors. The agency may also charge you a small monthly fee for the service, but your interest savings could more than cover the cost.\nGenerally, DMPs are only available on accounts that aren't backed by collateral, such as credit cards. And while you may be able to pick and choose which accounts you want to include in your DMP, you'll need to close all the credit cards that are part of the DMP. END