Debt management is typically repaying your unsecured debt (like credit card debt) principal in full within three to five years. It is often confused with debt settlement, which it is not. Settling a debt for less can greatly hurt someone’s credit and forgiven debt of $600 or more is taxed.
On a Debt Management Program (DMP), creditors will usually lower your interest rates as well as your monthly payment amount, giving you more financial breathing room. Additionally, creditors typically re-age accounts after making a few payments on a DMP. This makes your account current and no longer past due.
The DMP is an outstanding tool for many people to become debt free while improving their credit score (because as their debt is paid down, their score goes up). For more about debt management, visit https://www.ccoacares.com/services/money-management/debt-management/