A debt management plan is an agreement based on negotiation between the debtor and creditors to make a set monthly payment.
 The agreements are entered into by companies known as management plan 'operators' or 'providers', who negotiate with your creditors and manage the payments on your behalf.
  Under the debt management plan, you promise to repay your debts in full.
The negotiation is to decide on how much the monthly payments should be, based on how much you can afford to pay.
Creditors may also agree to waive off interest charges, late fees, and other incidental charges.
management plans can also be used to pay off your unsecured debts.
Before creating a management plan, you need to first analyze your financial condition and the reasons for it, track your monthly expenses and create a budget based on your income and expenditure to decide on how much disposable income is available to repay your debts.
Reduce spending on variable expenses that are not for your basic necessities.
After you finalize on a debt management provider, work with them to analyze the options for repayment that will be comfortable for you based on your income level and your necessary expenditure.
The credit plan should be constructed for a period of five years or less, based on the amount of debt you have accumulated.
By stretching out the payments, the monthly installments that you would need to pay would be small, even though it may take a longer time to repay your debt.
However, it is important that once the amount of the monthly payments is fixed, you should not default in making the payments.
Debt management also have certain disadvantages.
While you are enrolled for the management plan, you will not able to take any new loans.
Also, once the management plan provider is decided on, it becomes next to impossible to change the provider for the duration of the plan.
This is why it is crucial that you take utmost care while choosing the provider.