Professional Documents
Culture Documents
DEFINITION
• Debt management is simply the routine
practice of spending less than one earns
DEBT MANAGEMENT PLAN
• A Debt Management Plan (DMP) is a method
used in various countries for paying personal
unsecured debts. It is offered by a credit
counseling agency or an online debt
management company, to help you pay off
bills.
Steps Followed By Debt Management
Companies
• Step 1: listing all your creditors and the amounts
owed for each.
• Step 2: listing all incomes and expense i.e.
mortgage, car payments and cost of living
payments.
• Step 3: deciding how much of your income is
available to contribute to your Debt Management
Plan.
• Step 4: reviewing and approving your Debt
Management Plan.
Basic source of debts
• DOMESTIC DEBT
• EXTERNAL DEBT
DOMESTIC DEBT
It is the debt owed to creditors resident in the
same country as debtor
COMPOSITION OF DEMESTIC
DEBT
1. Floating debt
2. Permanent debt
3. Unfunded debt
1. FLOATING DEBT
• Floating debt comprises of short-term paper (T-
bills) up- to one year, which is tradable in the
market.
2. PERMANENT DEBT
• Permanent debt consist of long term debt, it
includes
Market loans
SLIC
FIBs
Prize bonds
3. UNFUNDED DEBT