Advantages of Debt Consolidation Using a Debt Management Program

If you are having trouble repaying your debts, you may want to consider debt consolidation using Debt Management Programs. These are programs that consolidate your credit card debts into one so that you only make a single monthly payment to the credit counseling organization that offers the program. The credit counseling organization will then pay off your creditors.

All in all, for this option to work, your creditors must agree to the arrangement of using a Debt Management Program. If your non-profit credit counselor is the one that recommended the program, creditors will agree because the option is in their best interest. The Debt Management Program enables you to repay your whole debt within five years. Most Canadians using the program pay off their debts within 3 years.

Who is the Debt Management Program (DPM) for?

  • People struggling with unsecured debts
  • People with debts that are over 20% of their income
  • People that are being harassed by the debt collectors

DPM is also good for other debts other than the credit card debt:

  • Unsecured personal loan debt
  • Retail store credit card debt
  • Past-due utility bills
  • Past-due cell phone bills
  • Gas cards
  • Auto Repossession Debt
  • Non-government student loan debt
  • Some medical bill debts
  • Credit union unsecured loans and credit card debt

Advantages of debt consolidation using DMP

  • You get to clear your debt within 5 years. This is because monthly repayments are fixed.
  • You will be charged zero or close to zero percent interest. This is better than any debt consolidation option you can find.
  • In 2 years of completing the Debt Management Program, your credit report and credit score will have been repaired completely.
  • You will get free one-on-one help from the majority of non-profit credit counseling organizations. You will get relevant budget, money saving as well as debt management tips.
  • You will not deal with creditors directly. This will reduce stress, give you better sleep, improve your relationships and even lead to better health.
  • The Debt Management Program is a great option if you want to avoid drastic debt relief forms like consumer proposal and bankruptcy.
  • Unlike consumer proposals and bankruptcies, DMP isn’t a legal process.
  • It is a formal debt repayment program with no permanent record and is private. Your records with the Debt Management Program will be erased completely within two years after you complete paying the loans.
  • The credit counselor will only agree to monthly repayments that you can comfortably afford.


  • The solution isn’t for everyone. The credit counseling organization should be able to convince creditors that it is the best way to ensure they get their money back. Creditors get a pay cut because you will only pay the principal.
  • Your credit score will be bad for the duration of using DMP and 2 years after.
  • When using for-profit credit counseling organization, you will deal with huge fees.

The DMP service is offered by both non-profit and for-profit credit counseling organizations. Stick with non-profit organizations to enjoy 0% or close to 0% interest rate. For-profit organizations charge a high-interest rate and you have to pay a huge upfront fee.