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When facing the burden of multiple debts, it's crucial to find a feasible way out with professional help. Credit Counselling Singapore CCS offers an effective solution through its Debt Management Programme DMP, which is specifically designed for debt-distressed individuals who wish to repay their unsecured creditors fully.
The DMP at CCS facilitates arrangements between suitable borrowers experiencing financial difficulties and major consumer banks or credit card issuers in Singapore, represented by The Association of Banks in Singapore ABS. This program enables the borrower to pay off debts including credit cards, lines of credit, personal loans, renovation loans, and study loans via affordable monthly instalments.
To qualify for the DMP, debtors must meet :
Total Unsecured Debt: Accumulate unsecured debts totaling $10,000 or more.
Multiple Creditors: Have financial obligations with at least two separate creditors.
Sufficient Payment Capacity: Demonstrate enough resources to fully repay all unsecured debts within a reasonable timeframe.
CCS, upon identifying the borrower's eligibility, will draft a formal debt restructuring agreement called a Debt Management Proposal and Schedule on their behalf. This document outlines the agreed-upon monthly instalment amounts that are affordable based on a budget created in consultation with a CCS credit counselor. Each creditor must approve this proposal before any repayment begins.
Reduced Interest Rates: Creditors may agree to lower interest rates, making it easier for debtors to manage payments.
Structured Repayment Plan: Debts are pd off systematically within a specified timeframe, alleviating financial stress.
Credit Bureau Reporting: CCS notifies credit bureaus about the DMP status, which impacts credit scores and future ling opportunities.
To embark on this program, an individual needs to undergo credit counseling. This process helps assess their financial situation and eligibility for debt management. After approval, a Debt Management Program is prepared including monthly payment schedules, budgeting guidance, and ongoing support from the CCS team.
Debtors receive comprehensive support through Credit Counselling Singapore's Debt Servicing and Support DSS program. This includes financial education workshops to improve money management skills, mental health advice, and sessions med at rebuilding creditworthiness upon successful completion of the DMP.
Completion of the debt repayment plan leads to removal of negative information from credit reports by CBS, allowing gradual recovery of one's credit rating.
While both options address financial distress, DMP provides a structured repayment plan with creditors' consent without the formal insolvency declaration required for bankruptcy. Bankruptcy requires legal proceedings and has more severe impacts on personal and business credit scores compared to DMP.
No, under the DMP terms, all unsecured facilities provided by banks are canceled. The program focuses on restructuring payments without introducing new debt obligations.
Credit Counselling Singapore's Debt Management Program offers a feasible solution for managing significant unsecured debt burdens through structured repayments at reduced interest rates. It provides a pathway to financial freedom with ongoing support and guidance tlored to each borrower's unique situation.
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