What is a debt management plan?

A debt management plan is a formal agreement between a debtor and creditor in which the debtor agrees to pay back a portion of their debt in an organized way. The debtor will negotiate with the creditor to establish the terms of payment and it is important for the debtor to make sure that these payments will be consistent so as not to fall behind. In Washington, a debt management plan can be established through the Consumer Debt Defense Law. This law allows debtors to dispute any unfair and deceptive debt collection practices that may have been used against them. The law also states that if a debt management plan is approved, the creditor will be legally obligated to follow the specified payment plan. Debtors will typically make payments each month to the creditor and may even be able to pay a reduced amount on the debt. It is important to keep track of these payments and make sure they are being made on time as to not fall behind. Additionally, any interest that accrues will be frozen while the debt management plan is in place. In Washington, debt management plans are a great way to help reduce consumer debt. The consumer debt defense law provides debtors the opportunity to negotiate with their creditors and establish an organized payment plan to pay back a portion of their debt. This in turn allows debtors to work towards a debt free future and avoid any further collection attempts from creditors.

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What is a debt management plan?

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