Debt management plan (DMP)

In credit counseling, a debt management plan (DMP) is a formal agreement between a debtor, a credit counseling firm and creditors. The debtor agrees to make a single, regular payment to the counseling firm, which distributes it among creditors on an agreed-upon schedule. Credit card firms offer some concessions to debtors who enter debt management plans by, for example, trimming interest rates. Entering into a debt management plan does not directly impact a credit score, but may indirectly make future borrowing more difficult, since some lenders may shy away from people who have had serious debt problems.