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How to Become Debt Free With a Debt Management Plan in Mississippi

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In a Nutshell

Getting out of debt is a process, but before you begin, it’s important to learn about the options you’ve got. Not every choice is right for everyone. We’re going to talk about the debt management plan option, which basically means you work with a credit counseling agency who will negotiate a reasonable payment on your behalf to address all your debts at once, so you can end up debt-free. Learning about this option can help you make the best choice to take control of your financial situation.

Written by Upsolve Team.  
Updated April 30, 2020


One option for getting out of debt is getting help from a credit counseling agency. Through a debt management program, you’ll work with an agency to try and negotiate one monthly fixed payment you and your creditors can live with that will pay off your debts. As part of your Mississippi DMP, the agency will speak to your creditors about interest rates and payment amounts. The goal is agreeing on a Mississippi debt management plan that makes everyone happy and gets the result you want. This repayment plan can pay off your debts in full, consolidate your monthly payments, and reduce the stress of juggling multiple payments each month. 

Agreeing to a debt management plan can be helpful, but make sure this is the best plan for you. Not all debts are covered under a debt management program. Mississippi debt management plans only cover some unsecured debts such as credit cards, personal loans, and in some cases medical bills. Payday loans are also usually excluded. Secured debts like auto loans and student loans are also not covered. Also, if you can’t stick to the terms of your Mississippi debt management plan and make payments on time, you may end up in worse financial shape than you started when you began. Late fees, penalties, and default interest rates can all happen if you fall behind on payments. If you can stick to a budget and follow the plan, though, this may be the best choice to fix your financial future and become debt free. Let’s get started!

Is a Debt Management Plan the Same as a Debt Consolidation?

It’s normal to think that a Mississippi DMP and debt consolidation are the same – they seem similar at first look. A Mississippi DMP, where a Mississippi debt management plan is created, is a type of consolidation. However, when most people talk about consolidating debt, they’re really talking about a debt consolidation loan, which falls under the consolidation umbrella. That umbrella also includes tools like personal loans and home equity lines of credit often taken out to pay debt that carries much higher interest rates such as credit card debt and payday loans, leaving you with lower monthly payments. These can be a good option, but keep in mind people with lower credit scores may not qualify for this kind of debt relief.

In a Mississippi DMP, on the other hand, you work with a credit counseling agency to develop a debt management plan leaving you with one monthly payment the agency distributes to your creditors until the debts are paid. These will leave you completely debt-free if you make your payments as planned. However, keep in mind that even after creditors close your lines of credit once the agency contacts them, you will generally not be able to accumulate more debt until the plan is finished. As you make payments, though, you’ll likely see a score increase on your credit report as your debt starts to shrink.

How to Become Debt Free With a Debt Management Plan in Mississippi

Getting out of debt is a process, but before you begin, it’s important to learn about the options you’ve got. Not every choice is right for everyone. We’re going to talk about the debt management plan option, which basically means you work with a credit counseling agency who will negotiate a reasonable payment on your behalf to address all your debts at once, so you can end up debt-free. Learning about this option can help you make the best choice to take control of your financial situation.


Find a Credit Counseling Agency

Locating a reputable credit counseling agency is step one in developing your Mississippi debt management plan. Two types of agencies exist: for profit credit counseling agencies that charge you for their services and nonprofit credit counseling agencies that get funding from other companies or organizations and only charge for some services, but not the initial credit counseling session. Both can help you develop a debt management plan. Credit counseling agencies offer services in many forms – in person, online, and even over the phone. Upsolve can help you locate a credit counselor near you that can help. 

If you are looking into any credit counseling agency, make sure to ask questions. You’ll want to know about initial costs and any additional fees that may come up down the road, what happens if you can’t afford their fees, and how your credit counselor is compensated. At for profit agencies, incentives can cause counselors to try and offer additional, costly options for their own gain.

When looking at nonprofit credit counseling agencies, try to find an accredited one because they’re required to comply with quality standards. The largest nonprofit financial counseling organization in the country, the National Foundation for Credit Counseling (NFCC), only allows certified credit counseling agencies as members. The NFCC contracts with an independent company, the Council on Accreditation (COA) that evaluates credit counseling agencies to see if they’re qualified to be accepted into the counseling organization. It’s also a good idea to check with the Mississippi Attorney General’s office for a history of any agency complaints. 

What to Expect at Credit Counseling

Don’t stress about meeting your credit counselor – the initial counseling session is just a 45 to 60-minute conversation about your financial situation and options that may work for you. Your creditors will never know you spoke to them or the details of your session. When you meet your counselor, it can be helpful to have documents showing your income, expenses, and debts handy. If you can, get a list of the total debt you owe each creditor, the interest rate on that debt, and minimum payments due each month. Your credit report is a helpful way to get started building a complete list of secured and unsecured debts – you can get one for free each year here

Once you go over your financial picture with your counselor, you’ll set some short- and long-term financial goals. At the end, your counselor should offer suggestions on solutions they think may be right for you – a debt management program may be one. If you opt for this choice, you’ll work together to develop an action plan to repay your debts. You should leave with an idea about the next steps from your credit counselor. 

Making the Decision & Getting Started

You should ask a lot of questions before making a final decision about a Mississippi DMP – both of your counselor and yourself. If you’re working with a for profit credit counseling agency, you’ll want to know how your counselor is paid. If it’s on commission, they may be trying to steer you towards a more expensive debt solution. No matter the situation, your counselor shouldn’t pressure you to make a final decision at the close of the initial counseling session. You should be comfortable with your choice and good counselors respect that that may take time. You’ll want to ask about any setup fee or monthly fee associated with your Mississippi debt management plan – it’s legal to charge them, but they’re usually small and built into your single monthly payment. You may also want to ask about the credit counseling agency’s relationship with your creditors. The more you know, the better. 

Next, you’ll want to start asking yourself questions. Can you stick to a budget? Can you make this commitment? If the answer to either is no, you may find yourself in worse financial shape than you started if you can’t follow through on your debt management plan. Remember you have other options as well – there are many debt solutions, and in some cases, bankruptcy may be the best choice for you. Upsolve can help you find a Mississippi bankruptcy attorney to advise you if you want to know more. 

Put Together Your Mississippi Debt Management Plan

When putting your Mississippi debt management plan together, your counselor will need important financial information from you in order to put a plan together you can successfully follow. This won’t be the general information about your income and debts from the initial session – you’ll need to gather information on your bank account, credit card accounts, and outstanding debts. Your counselor may even ask for cardholder agreements credit card companies provided you when you opened your account. These are agreements you and the company have that explain the terms you agreed to for your relationship with them. You can find current examples for all major creditors here

Remember that outside making your payments on time, this may be the most important part of the process – be thorough, review details, and think about if the terms actually work for you. Your counselor can answer questions about when they’ll start paying creditors, the amount of your fees, and what to do about payments coming due in the meantime. If you have a question or concern, now is the time to ask. The decision is yours, so be informed!

Begin Payments

Your credit counselor should clearly explain your monthly payment amount and the due date – make note of them because they are critical to staying on track with your Mississippi debt management plan. Your credit counseling agency will contact creditors to try and have them accept your plan once you begin making payments. During your initial counseling session, your counselor should also have outlined a timeline for the outcome of negotiations. They have well established relationships with banks and lenders, so they should be able to provide an estimate so you’re not waiting anxiously by the phone. You can also call your credit counseling agency to ask about updates on individual creditors. 

The most important job you have is paying on time. Pay early if possible. Even though your credit score may initially go down as creditors are contacted and close your account, don’t panic. Keep paying. Your credit score should rise as the balance of your total debt starts to shrink. 

How to Stay Current with your Mississippi Debt Management Plan

Congratulations! A lot of the hard work is done once you’ve established your Mississippi debt management plan with your credit counseling agency. Now you just have to stick to the action plan and follow through. You discussed with your credit counselor – now that you know the amount of your monthly payment, you should map out your finances to make sure you can keep your Mississippi DMP current. Personal finance planning is important; tracking your spending through a budgeting app, a spreadsheet, or even a pen and paper ledger may be helpful to detect unexpected spending. Pay close attention to the monthly reports you’ll receive from your credit counseling agency – they can help you see if you’re on track and give you a sense of accomplishment as your balances shrink. 

Remember to save some money for an emergency fund – life is unpredictable, and a large expense could come up unexpectedly. If you end up with disposable income, consider making extra payments. However, don’t forget to reward yourself; talk to your credit counselor to see if there are small ways to celebrate milestones in your repayment!

Mississippi Debt Consolidation

A Mississippi DMP is a type of debt consolidation, but most people talking about “debt consolidation” are actually referring to a debt consolidation loan. Transferring all your credit card debt to one card with a lower interest rate, as well as getting a loan with lower interest rates to pay multiple debts, fall under the debt consolidation loan umbrella. Remember Mississippi debt consolidation may not be available to individuals unable to secure loans due to their credit score. These loans also just shift one type of debt somebody can’t pay into another type of debt people often can’t afford to pay, so be careful when considering them!

Mississippi Debt Settlement

A Mississippi debt management plan is a negotiated payment plan designed for you to pay your debts in full. Debt settlement, on the other hand, disposes of debts for a fraction of what you owe. Both involve a monthly payment, but while the payment under a Mississippi DMP is passed from your credit counseling agency to your creditors, Mississippi debt settlement payments are pooled in a fund the agency uses to offer your creditors a lump sum payment to settle. Once the fund is large enough, the debt settlement company  contacts individual creditors to negotiate settlements for less than you owe. Though the savings may be big, creditors don’t have to agree to settle and some debt settlement companies aren’t reputable or trustworthy. 

This option may be best for individuals with funds already available for lump sum settlements, because while the fund builds your creditors aren’t getting paid. Creditors can report delinquency to credit bureaus and try to recoup their money through collection calls and collection agencies, or even sue you. This can severely affect your credit score. 

Mississippi Bankruptcy

If other debt solutions aren’t available to you or don’t seem like the best option, you can consider whether you’re eligible to file a Mississippi bankruptcy. Bankruptcy may provide partial or complete debt relief, not all debts, however, like federal student loans, are eligible for a discharge. You should also consider that though many debt relief options will have a short-term negative impact on your credit score, bankruptcy takes up to 10 years to come off a credit report. 

You may want to speak with a Mississippi bankruptcy lawyer to see if this is right for you. However, if you’re concerned about the possible expense, you can see if you’re eligible for Upsolve’s help completing your bankruptcy without an attorney. 



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