Estimate your potential monthly payment and payoff timeline under a Debt Management Plan (DMP).
Your Estimated DMP Outcome
$0.00
Estimated Payoff Time: N/A
Estimated Income Available for DMP: $0.00
Understanding Debt Management Plans (DMPs) and This Calculator
A Debt Management Plan (DMP) is a program offered by credit counseling agencies to help individuals manage and repay their unsecured debts. When you enroll in a DMP, you make a single monthly payment to the agency, which then distributes the funds to your creditors. DMPs often come with reduced interest rates, waived fees, and a structured repayment schedule, making it easier to become debt-free.
How the Calculator Works:
This calculator provides an estimate of what your monthly payment and payoff timeline might look like if you were to enroll in a DMP. It takes into account your total unsecured debt, your monthly income, your current minimum payments, and an estimated monthly fee for the DMP service.
Inputs Explained:
Total Unsecured Debt Amount: This is the sum of all debts that are not secured by collateral, such as credit card balances, personal loans, and medical bills. Mortgages and car loans are typically secured debts and are not usually included in a DMP.
Your Monthly Net Income: This is the amount of money you take home after taxes and other mandatory deductions. It represents the funds available for all your living expenses and debt repayments.
Total Current Minimum Monthly Payments: This is the sum of the minimum payments you are currently making across all your unsecured debts.
Estimated Monthly DMP Fee: Credit counseling agencies charge a fee for managing your DMP. This amount is an estimate and can vary by agency.
Calculation Logic:
The calculator performs the following estimations:
Disposable Income for DMP: It first calculates the amount of income potentially available for your DMP payment. This is done by subtracting your current minimum debt payments and the estimated DMP fee from your monthly net income.
Disposable Income = Monthly Net Income – Total Current Minimum Monthly Payments – Estimated Monthly DMP Fee
Estimated Monthly DMP Payment: The calculator then suggests a monthly payment. A common approach in DMPs is to aim to pay off debts within a reasonable timeframe (e.g., 3-5 years) while accounting for the total debt and potentially reduced interest rates (though interest rate reduction is a benefit negotiated by the agency and not directly input here). For simplification, this calculator focuses on the available disposable income. If the disposable income is significantly higher than what's needed to cover estimated debt amounts with potential rate reductions, the agency might work with you to set a more aggressive payment. A common guideline is to allocate the calculated 'Disposable Income for DMP' as your monthly DMP payment, as long as it's sufficient to make reasonable progress. If this value is too low to cover even basic repayment, it might indicate the need for further financial review. For this calculator, we'll use this as the primary indicator for potential monthly payment.
Estimated Payoff Time: This is estimated by dividing the total unsecured debt by the calculated monthly DMP payment. This is a simplified calculation that assumes no additional interest or fees beyond the DMP fee. In reality, reduced interest rates negotiated by the agency will significantly impact the actual payoff time.
Estimated Payoff Time (in months) = Total Unsecured Debt Amount / Estimated Monthly DMP Payment
Important Note: This calculator provides an *estimate*. Actual DMP terms, including the exact monthly payment, interest rate reductions, and payoff timeline, will be determined by the credit counseling agency based on your specific financial situation and negotiations with your creditors. It's crucial to consult with a reputable non-profit credit counseling agency for personalized advice.
function calculateDMP() {
var totalDebt = parseFloat(document.getElementById("totalDebt").value);
var monthlyIncome = parseFloat(document.getElementById("monthlyIncome").value);
var currentMinPayments = parseFloat(document.getElementById("currentMinPayments").value);
var dmpFee = parseFloat(document.getElementById("dmpFee").value);
var monthlyPaymentResult = document.getElementById("monthlyPaymentResult");
var payoffTimeResult = document.getElementById("payoffTimeResult");
var remainingIncomeResult = document.getElementById("remainingIncomeResult");
// Clear previous results
monthlyPaymentResult.innerText = "$0.00";
payoffTimeResult.innerText = "Estimated Payoff Time: N/A";
remainingIncomeResult.innerText = "Estimated Income Available for DMP: $0.00";
// Input validation
if (isNaN(totalDebt) || totalDebt <= 0) {
alert("Please enter a valid total unsecured debt amount.");
return;
}
if (isNaN(monthlyIncome) || monthlyIncome <= 0) {
alert("Please enter your valid monthly net income.");
return;
}
if (isNaN(currentMinPayments) || currentMinPayments < 0) {
alert("Please enter a valid total of your current minimum monthly payments.");
return;
}
if (isNaN(dmpFee) || dmpFee 0) {
estimatedPayoffTimeMonths = totalDebt / estimatedMonthlyDMPPayment;
}
// Display results
monthlyPaymentResult.innerText = "$" + estimatedMonthlyDMPPayment.toFixed(2);
remainingIncomeResult.innerText = "Estimated Income Available for DMP: $" + estimatedMonthlyDMPPayment.toFixed(2);
if (estimatedPayoffTimeMonths > 0) {
var years = Math.floor(estimatedPayoffTimeMonths / 12);
var months = Math.round(estimatedPayoffTimeMonths % 12);
var payoffString = "";
if (years > 0) payoffString += years + " year(s) ";
if (months > 0) payoffString += months + " month(s)";
if (payoffString === "") payoffString = "Less than 1 month";
payoffTimeResult.innerText = "Estimated Payoff Time: " + payoffString + " (based on available disposable income)";
} else {
payoffTimeResult.innerText = "Estimated Payoff Time: N/A (Insufficient disposable income for significant payment)";
}
}