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Nowack & Olson, PLLC Florida Bankruptcy Lawyer
  • $0 down and low payment plans available. We can assist you without having to leave your home.

Debt management plans

Many people in Florida and around the country struggle with their bills. While they do their best to get caught up, they are not always able to do so. These individuals often experience a great deal of stress, creditor harassment and, in some cases, may even be taken to court by creditors.

One option for some of these debtors is entering into a debt management plan (DMP). This is a debt relief option that is sometimes offered as part of credit counseling. A credit counselor reviews a client’s current income, debts and expenses and determines whether a DMP is a feasible option.

In a DMP, the credit counselor approaches the client’s creditors and negotiates a smaller monthly payment amount. The client then makes one payment to the credit counseling service each month, which is distributed to the creditors. The advantage of this system is that it can lower monthly payments while ensuring that creditors are paid what they are owed. It can also make things easier on a debtor when he or she only has to make one payment per month.

This approach is not without its difficulties, however. Some creditors will not work with credit counselors, and there may be fees associated with the payment plan. In addition, some individuals and families have extremely high debt levels that can’t be managed under a DMP.

Individuals and couples who are trying to manage their debt may benefit from speaking with an experienced bankruptcy lawyer. The lawyer may be able to review the client’s circumstances and let them know if a DMP is the wisest approach. If not, the lawyer may be able to assist the client in filing for Chapter 7 or Chapter 13 bankruptcy.

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