Debts can get out of control quickly. A lot of people learn that fact the hard way. One simple and effective method of paying off your non-priority creditors is through a debt management plan (DMP). DMP is part of credit counseling service. This type of counseling is available to consumers who have trouble with payment of their debts, and include services such as: • Money management classes • Budget counseling • Referrals to similar helpful services • Housing counseling • Debt counseling When you ask for assistance using a DMP, a debt counselor will calculate a realistic amount of money that you can afford to pay monthly after paying off your priority debts. Priority debts are those debts where non-payment will give your creditors the right to sue you, or confiscate any of your properties. Usually, when you go through a DMP, here is what you can expect: • A credit counselor will make a full assessment of your financial situation. You will be asked to provide information such as your monthly income and expenditure, creditors, and other related things. • Based on the information you gave, your credit counselor will come up with a financial statement, which will then determine how much money you can pay monthly to pay off your debts. • Your counselor will then approach your creditor and negotiate for a reduced payment. Most of the time, creditors will be happy to agree to something that will help you pay off your debts to them, especially if the monthly figure you will be able to pay is a realistic figure for you. The more realistic it is, the more sustainable it will be. • You make your monthly payments. • Once in a while your credit counselor will assess your situation and check to see if your monthly payment is still applicable to your circumstances. • You may continue paying through the DMP until you have cleared your debts, or you may also choose to voluntarily end it. To make sure that you are getting the right kind of quality service from a credit counseling agency, check the following criteria: • Is it an accredited and nonprofit agency? - The minimum requirement you should look for in a credit counseling agency is that it is a registered nonprofit agency. • Do they employ certified counselors? – most credit counseling agencies have in-house training programs, but it’s best if their counselors also passed certification exams to test their knowledge in areas such as budgeting, bankruptcy, consumer law, and the likes. • Do they provide a varied list of debt management options? • Do they charge reasonable fees? – Most credit counseling agencies do not charge people for their services, and put 100% of their monthly payments towards their debts. Some would charge a minimal monthly fee for administering DMP. If you decide to go with an agency’s DMP, make sure that you have all the agreements regarding fees into writing. • Are they transparent with their declaration of fees and services? – Determine if the company will give you the information you need without asking for financial information from you first. The agency must also be able to show you a record of all the payments you made and your remaining balances. • Do they have a clean business record? – You may check this information with the Better Business Bureau (or similar government agencies in your country) to find out if there has ever been any complaint filed against the agency. There are many resources available online to help you with finding the right Debt Management Plan that will work for you.