Financial Resource

Is a debt management program, DMP the right choice for your financial situation?  Many people are planning to file bankruptcy in the hopes of just getting their debt wiped clean.  This has plenty of downfalls, of course, such as a 10-year black mark on your credit score, which will limit your access to new credit.  You can overcome your debt through other means, such as a debt management program, or DMP.  You may even have to use this option or others before you can actually file for bankruptcy.  Depending on the situation itself, a debt management program may be the best way to go anyway.

Why Not Bankruptcy?

Why shouldn’t you file for bankruptcy?  There are many reasons why you should consider a debt management program or DMP instead of bankruptcy filing.  Here are some of them.

• Bankruptcy means that you will not pay back your debts, which is the worst thing to have on your debt, especially if you do not have any information to back it up in terms of a reason.  To future lenders, this looks bad!
• A debt management program, DMP, will help you to overcome your debt by restructuring it in a specific way that makes it easier for you to repay.  Because you are repaying the debt, lenders see this as more favorable.
• Bankruptcy will hurt your credit score for ten years or more.  Most debt management programs are finished within one to three years, sometimes even less. 
• You may not qualify for Chapter 7 Bankruptcy, which is discharge.  Instead, you may be forced to restructure your debts anyway, which means going through a counseling service just like a debt management program or DMP. 

With bankruptcy, you have limited options into your future, but for some it may be the only option.  When you meet with a representative or counselor from a debt management program or DMP, you will have to work through a budget to determine how much money you have to repay your creditors.  If you do not have enough money coming in to pay all of your bills, you will need to decrease your expenses or increase your income, or both.  If you do not do this, your debt management program or DMP counselor will information you that the program may not be an option for you, in which case bankruptcy may be the only option. Before you make this decision, though, stop and talk with a professional from these services.  Find out what they can offer you and how the program works.  You may have options.

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