What Is A DMP? What Are Its Benefits?
If you are asked What is a DMP? you should know is a debt resolution method (Debt management plan) that aims at making your debt repayment more manageable to you. Unlike individual voluntary arrangement, with DMP you make payments to an agency which acts as the intermediary between you and your debtors.
It is a strategic way of handling conventional loans and avoiding facing a heavy penalty like your assets getting auctioned. Other benefits of DMP include;
Channeled debt payment
With DMP, all your debt is handed over to an agency. It is there for the responsibility of the agency to make sure that your debtors receive a certain amount of money from the monthly payments that you make to your agency. The fact that you will only make a single payment every month to cover your debt allows you to have better management of your finances. Additionally, it saves you from all the complicated calculations you may need to go through to confirm if you have made the right payments to the correct debtors.
No direct contact with the creditor
Debt collectors can push you to the limit failing to understand that maybe you have a financial crisis that you require more time to fix. With DMP, the debt collectors are prohibited from contacting you directly. Instead, they have to go to your agency in case they need any assistance concerning the developments of the debt repayment. However, it is good to know that some of the requirements for DMP are that you make a single lump sum of money as a down payment for proceeding with your plan.
Avoid selling your house
Debts can be life ruining, and that is why you need to be prepared when you have to come face to face with your obligations. Instead of doing something that you will regret for the rest of your life like selling your house, you can always go for DMP. Remember that at times, all you require is a little more time for you to get your financial status back on track. By selling your house, you may end up regretting since you may not have known ha there are other ways of handling your debts without having to sell the one place that holds all of your family moments and history.
The possibility of interests and other charges on loan evoked
One of the reasons why paying back a loan can be impossible is because the debts become too big for you to settle on your regular salary or budget. With DMP, such charges like interest rates can be frozen until you can clear your debt. The advantage of this is that you will no longer have to compete with the ever-growing debt that keeps draining you all the time. However, it necessary to know that, this depends on the debt collector because they don’t necessarily have to agree to freeze the charges.
Handling debts today should not stress you out because at the end of the day you need a piece of mind for you to figure out how to handle your obligations. With DMP services, your debts will no longer ruin your life.