Is a Debt Resolution Plan Right for Me?
A debt resolution plan (DRP), also known as debt resolution program, is a non-profit take on debt settlement. You consolidate your debts into a single monthly payment while the debt counselors at MMI negotiate with your creditors to secure a repayment agreement that’s less than what you owe.
The DRP is a great option for consumers who may have otherwise thought they’d never be able to get out of debt, but is debt resolution the right plan for you? The following questions should help you get started and a debt and budget counselor can offer more custom support:
Are your creditor accounts current and in good standing?
The DRP, like traditional, for-profit settlement options, only works if your accounts are in collections, are delinquent, or are about to become delinquent. Creditors won’t accept a settlement unless an account is charged off and in collections.
If your accounts are in good standing and you intend to keep them that way, a DRP isn’t your best option. However, if you’re struggling to keep up with current payments and are one unexpected expense away from falling behind, you may potentially benefit from a DRP.
Can you afford other debt relief options?
Becoming delinquent on your accounts and agreeing to a settlement are both hard on your credit. If your accounts are current and you can afford the payments for another, more credit-friendly option like a debt consolidation loan or a debt management plan (DMP), those may be better options for you.
If those options aren’t affordable, however, then a DRP may be the better fit. Because you aren’t repaying your debts in full with a debt resolution plan, the payments are typically much more affordable than other options you may have considered.
Do you need help dealing with creditors and collection agents?
If you’re behind on your payments, the calls have probably already started. For most people, the only thing worse than falling behind on your debts is having to talk to your creditors about it.
With a debt resolution plan, the debt counselors at MMI can take that burden off your shoulders. We’ll work directly with your creditors to negotiate a repayment plan that saves you money and clears your debts. While you still may continue to receive phone calls from your creditors, you can direct them to MMI and let your debt counselor handle those conversations.
Are you concerned about your credit score?
The settlement process can be tough on your credit score. Missing payments, getting charged off, and settling for less than what you owe are all bad for your credit.
If you’re already behind on your accounts, however, your credit score has likely already been dinged. And if that’s the case, your priority should be getting out of debt and stabilizing your finances. Rebuilding your credit can come after.
Ultimately, a debt resolution program can potentially work for anyone who’s unable to handle their current debt payments, but it’s a unique program with its own pros and cons. If you’re curious what a DRP might look like for you, complete a free online financial analysis . We’ll review your debts, income, and expenses and let you know what debt relief option makes the most sense for your unique situation.
