04.30.09
DMPs
This blawg is geared more toward businesses, but I thought it might be worth pointing out this short article about debt management plans (”DMPs”). DMPs are like Chapter 13 Bankruptcy Plans: A consumer agrees to pay $___________ to unsecured creditors (generally, credit card companies) for ______ months/years. Upon successful payment, the credit card balances are wiped clean. In the meantime, the credit card companies agree not to undertake any collection actions.
In order to enter into a DMP, you need to consult with a credit counseling agency recognized by major credit card companies. The agency had pre-approved forms and a general idea of what type of payment concessions they could get from the credit card companies.
DMPs have been growing less popular because credit card companies have been offering less concessions, but that trend is apparently going to stop. “[M]ore recent reports indicate that creditors and agencies are co operating in launching a new DMP which they assert will be more valuable to more of the consumers who are defaulting on credit card debt but who cannot not make the payments required under traditional DMP’s.”
It’s worth it for businesses and banks to keep this in mind. They might have customers who can’t pay or need some help, but they don’t want to file bankruptcy. DMPs might become a viable resort again. If your customers get healthier, you’re healthier.
