FAQ for Prospective DMP Clients

Frequently Asked Questions

How can the Debt Management Plan (DMP) help me?

People join the DMP for different reasons–some for reduced or eliminate interest and fees; some for the shortened payoff time, others because they want to pay back their debt rather than file for bankruptcy, but they don’t know how to do so.  See if a DMP may be appropriate for you. A free credit counseling visit can also help you know if you would benefit. Call 800.750.2227 or get started online.

Will a Debt Management Plan hurt my credit?

Slow repayment of unsecured debt directly or through a DMP will, usually, result in gradual improvement in a client’s credit score. The DMP is a good alternative for those with high credit card debt that has become unmanageable–including a history of late payments. High debt, late payments, missed payments, accounts in collection already cause most joining the DMP to start with damaged credit.  Most, but not all, creditors show delinquent accounts as current after the creditor accepts the DMP and three consecutive payments have been received. Others do not and may leave a note that you were on the program for up to seven years. If this is a concern, before signing up, call each of your creditors and ask how they report participation in DMPs to the credit bureaus.

Per Fair Isaac & Company, the company that created the FICO scoring system formula (a system for quantifying a consumer’s credit worthiness), the formula ignores any reference to enrollment in a Debt Management Program.

What are the fees for the administration of a Debt Management Plan?

For residents of most states, the monthly fee is 8% of monies disbursed by ClearPoint monthly to your creditors–with a maximum of $40 per month, or the maximum allowed by applicable state law.

How long will it take for me to pay off a DMP?

Your payoff time is dependent on the amount of your outstanding debt and your ability to make substantial monthly payments. If you owe more and make less, the program will last months or years longer than for someone with more resources.  Most of our clients are out of debt by 3 – 3 1/2 years. The maximum time you can be on the program is 60 months. If you’re interested, your credit counselor will estimate your payoff time during your session.

Will I be eligible for new credit after completing a DMP?

For the majority of clients, yes. However credit grantors using risk-based-pricing are likely to charge higher rates until your credit improves. We offer tips for those on a DMP to rebuild your credit.