Debt management plan an option for reducing what is owed

By Oscar Monfort on Jun 18th, 2010

There are a number of options troubled consumers may turn to when dealing with out-of-control bills, including a debt management plan.

According to a recent piece by USA Today columnist Sandra Block, a debt management plan is a program offered by consumer credit counseling agencies as a way to help people reduce the amount they owe.

"With a DMP, you agree to make monthly payments to a credit-counseling agency over a specific period, usually three to five years," Block wrote. "Those payments are used to pay off your debt."

By using a debt management plan, consumers may find that credit card companies might be willing to reduce interest rates.

Consumers have already made some strides when it comes to trying to pay down their debt. According to a recent report from the Federal Reserve System, the amount of money loaned on credit cards fell at an annual rate of 12 percent in April. Last year saw it fall 9.6 percent.

However, overall consumer credit increased slightly, rising at a rate of 0.5 percent for the month.

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