Federal Deception Law: 11.2.1.2 Debt Management Plans Described
After education, debt management plans (DMPs) are one of the most prominent tools that credit counseling agencies offer to assist indebted consumers. An estimated one-third of counseling agency clients enroll in DMPs.47 Under a DMP, a consumer agrees to send a lump sum to the credit counseling agency, usually on a monthly basis. The agency then distributes that payment to the consumer’s various unsecured creditors on a similar schedule, until the consumer has fully paid off all debts included in the plan.