Debt Consolidation

Debt Management Plans: What Are Your Options?

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These days, it’s common to struggle with debt. The average person has $6,194 in credit card debt alone, according to Experian. You may also have student loan debt, personal loans, medical debt and car loans to worry about, too.

If you can’t keep up with your payments, you may be considering enrolling into a debt management plan. However, not all debt management programs are the same. Depending on the credit counseling agency and your location, they can vary in terms of fees and structure. If you’re looking for a reputable credit counseling agency to set up a debt management plan, here’s what you need to know.


6 debt management plan options

Under a debt management plan, you pay money each month to a credit counseling agency. The organization uses that money to pay your credit card bills, medical bills or other debt according to a schedule they work out with you and your creditors. In some cases, the credit counseling agency will negotiate with your creditors to get you a lower interest rate or will convince them to waive some fees.

There are six major credit counseling agencies that offer debt management plans:

Credit counseling agency Costs Where services are available
American Consumer Credit Counseling (ACCC)
  • $39 enrollment fee
  • $5-$50 monthly maintenance fee
  • All 50 states
Cambridge Credit Counseling
  • $40-$75 enrollment fee
  • $30-$50 monthly maintenance fee
  • Not available in Minnesota, Virginia or Wisconsin
Consumer Credit Counseling Services (CCCS)
  • $25 enrollment fee
  • $40 monthly maintenance fee
  • All 50 states
GreenPath Financial Wellness
  • $0-$50 enrollment fee
  • $0-$75 monthly maintenance fee
  • All 50 states, but only has branches in 22 states
Money Management International
  • $0-$50 enrollment fee
  • Minimal monthly maintenance fee
  • All 50 states, but in-person counseling is only available in 29 states
Navicore Solutions
  • $25-$50 enrollment fee
  • Minimal monthly maintenance fee
  • All 50 states

1. American Consumer Credit Counseling (ACCC)

  • Enrollment fee: $39
  • Monthly maintenance fee: $5 to $50

ACCC is a nonprofit credit counseling agency that offers counseling and debt management plans in all 50 states.

Through ACCC’s debt management plan, all of your creditor payments are combined into one monthly payment. Once ACCC receives your payment, they disburse it to your creditors on your behalf. ACCC works with your creditors to negotiate a lower payment and a lower interest rate. Through the program, you can get completely out of debt within 60 months.

ACCC doesn’t charge a fee for budget counseling. However, there’s a $39 fee to enroll in a debt management program, plus a monthly maintenance fee of $5 to $50. Depending on your financial situation and state regulations, ACCC may decide to waive those fees.

2. Cambridge Credit Counseling

  • Enrollment fee: $40 to $75
  • Monthly maintenance fee: $30 to $50

Available for consumers in every state except Minnesota, Virginia and Wisconsin, Cambridge Credit Counseling’s debt management plan allows you to consolidate your debt into one monthly payment. According to the company, you can reduce your credit card interest rates by 64% on average, reducing your interest rate from 22% to just 8%.

Plus, you’ll lower your monthly payments. On average, your payments may decrease by 25%, saving you about $140 per month. Clients usually pay off their debt in 48 months.

If you decide to set up a debt management plan through Cambridge Credit Counseling, there is an initial enrollment fee that can be as high as $75, depending on your state. There is also a monthly maintenance fee that is capped at $50. However, the company reported that the average initial fee is just $40, and the average monthly fee is just $30.

3. Consumer Credit Counseling Services (CCCS)

  • Enrollment fee: $25
  • Monthly maintenance fee: $40

CCCS recommends its debt management plan for consumers who have $10,000 in debt or less.

Through the debt management plan, CCCS will work with your creditor to secure some concessions, such as waiving interest charges, lowering your monthly payments, or changing the status of your account from delinquent to current to stop late fees.

CCCS is made up of many chapters all over the U.S. that service different areas. Fees and terms and can vary between locations. For example, at CCCS of Northern Illinois, there is a $25 enrollment fee and a minimal monthly maintenance fee. By contrast, the CCCS of Rochester has a $25 enrollment fee, and a $40 monthly maintenance fee.

There are CCCS counseling offices in all 50 states.

4. GreenPath Financial Wellness

  • Enrollment fee: $0 to $50, depending on your state and amount of debt
  • Monthly maintenance fee: $0 to $75

According to GreenPath Financial Wellness, the company will contact your creditors to stop collection calls, lower your interest rates, reduce your monthly payment and waive late fees or over-the-limit fees.

With Greenpath Financial Wellness, debt management fees are dependent on your state of residence and the amount of debt you have. There is a one-time enrollment fee that ranges from $0 to $50, and a monthly maintenance fee that ranges from $0 to $75.

GreenPath Financial Wellness works with residents in all 50 states.

5. Money Management International

  • Enrollment fee: $0 to $50
  • Monthly maintenance fee: Minimal monthly maintenance fee

Money Management International operates in all 50 states but only offers in-person counseling at branches in 29 states.

When you sign up for a debt management plan, a Money Management International counselor will talk to your creditors to reduce your interest rates, waive late fees, lower your payments, and end collection calls. Counseling is available 24 hours a day, seven days a week, so you can work with someone on your own schedule.

There is a one-time enrollment fee and a monthly maintenance fee, but those fees are dependent on your location and your debt. For example, Michigan residents may have an initial fee of $50. However, you may qualify for a fee waiver if you meet federal poverty guidelines.

  • Enrollment fee: $25 to $50
  • Monthly maintenance fee: Minimal monthly fee

Through Navicore Solutions’ debt management plan, you could pay off your debt within five years. Navicore will work with your creditors to negotiate lower interest rates, reduce your monthly payments and waive certain fees.

Navicore Solutions operates in all 50 states. There is an initial enrollment fee that can be between $25 and $50, depending on your location. There may also be a monthly maintenance fee.

How to choose a debt management plan

If you think a debt management plan sounds like the right solution for you, it’s important to do your homework before selecting an agency. There are literally hundreds of credit counseling agencies nationwide, and not all of them are reputable.

When evaluating potential agencies, look at the following factors:

  • Look for an approved agency: The U.S. Department of Justice maintains a database of approved credit counseling agencies, so you can find a reputable agency near you.
  • Think about how you’d like to connect with a counselor: Which agency is best for you is dependent upon your communication style. If you prefer to connect with a counselor electronically, look for an agency that offers remote communication options. Otherwise, you may opt for an agency that offers in-person support if you need more one-on-one attention.
  • Understand the costs: Fees vary widely from agency to agency, so make sure you know the costs involved with the agency’s debt management plan. If you can’t afford an agency’s fees, make sure you explain that to the counselor. In some cases, they may waive or reduce them.
  • Review complaints: Check each prospective agency with your state attorney general and local consumer protection agency. They will be able to tell you if consumers have lodged complaints against those credit counseling agencies you’re considering.

Debt management FAQ

  • What is debt management? With a debt management plan, you work with a credit counseling agency to develop a payment plan. The agency negotiates with creditors on your behalf to lower interest rates, waive fees and reduce your monthly payments. You make payments directly to the agency, and the agency disburses the money to your various creditors.
  • What are the pros of debt management? If you stick with your debt management plan, you could be debt-free within five years. Plus, you’ll consolidate your payments and have just one monthly payment to remember. Because the credit counseling agency works on your behalf, you may be able to pay less interest and fewer fees.
  • What are the cons of debt management? When you enter into a debt management plan, you must agree to stop using your credit cards, or you may have to close them entirely. You can’t open up new lines of credit — such as a personal loan or car loan — and not all creditors are willing to participate.
  • Is a debt management plan right for me? A debt management plan can make sense if you have unsecured debt, such as credit card debt, personal loans or medical debt. It will only work if you have a source of reliable income, and the credit counseling agency can negotiate with creditors to lower your interest rates so you save money.

3 debt management plan alternatives

Debt management plan alternative What it is
Debt consolidation loan A personal loan you use to consolidate your debt and secure a lower interest rate
Bankruptcy Remove your obligation to repay your debt by declaring bankruptcy
Debt settlement Strive for a balance reduction by negotiating with creditors

1. Debt consolidation loan

A debt consolidation loan is a personal loan you take out to refinance existing debt. The personal loan you take out will be in the amount of your unsecured debt (such as the combined balance of your credit cards).

Ideally, the personal loan will have a lower interest rate than your old debt. That way, you’ll repay your debt with fewer fees. You may take out a personal loan that shortens your repayment timeline, or you might choose a longer repayment term. Although your overall cost for borrowing would be higher, this would lower your monthly payment, freeing up cash for other financial obligations.

Is this a good option for you? Consolidating your debt can work if you have strong credit and can qualify for a low-interest loan. If your credit is already damaged, you may not be able to qualify for a loan at all, or you may be stuck with a high interest rate.

2. Bankruptcy

When you declare bankruptcy, you must go to court and pay filing fees, and the court will review your finances — including your assets and debt — to decide whether or not to grant your petition. If approved, you’ll no longer be responsible for repaying your unsecured debt.

Declaring bankruptcy is a serious process with long lasting consequences. A bankruptcy can stay on your credit report for seven to 10 years.

Is this a good option for you? Bankruptcy may be a viable option if you’re unable to pay off your debt within the debt management plan’s timetable, or if you’ve become disabled or otherwise unable to work and pay down your debt.

3. Debt settlement

Debt settlement is a risky debt management approach. With this strategy, you stop making payments on your current debt. Instead, you make payments to a debt settlement firm, who reaches out to your creditors on your behalf. The firm tries to get a balance reduction, meaning the creditor will consider the debt satisfied if you pay a lesser amount that the current balance.

However, debt settlement fees can be quite expensive, and the process can damage your credit since you’d stop making payments.

Is this a good option for you? Debt settlement can work if you have enough money saved to pay a lump sum toward your balances, and if you don’t mind damaging your credit score.

The bottom line

If you feel like you’re drowning in credit card debt or medical bills, there are ways to tackle your debt. Coming up with a debt management plan can be a smart strategy to handle your debt, and can help you pay off your balances within five years.

If you’re unsure how to proceed, contact a nonprofit credit counseling agency, such as the National Foundation for Credit Counseling, to discuss your situation and your options.


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