How to Find a Debt Management Program

How to Find a Debt Management Program
BY Charla Myers
Jun 25, 2018
Key Takeaways:
  • Debt management companies that are members of National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA) must adhere to best practices and ethical standards.
  • You can research debt management companies by checking reviews on the Better Business Bureau, TrustPilot, and other sites.
  • Compare fees financial education and tools when choosing a debt management plan.

If you’re concerned about debt or struggling to make your monthly payments, then you may be looking to take steps to lighten your debt load and improve your financial health. There are many ways to do this and the method you choose will depend on your particular situation and goals. One option is a debt management program, which is intended to help you strategize and pay down your debts in a disciplined manner.

Debt management companies (also called credit counseling companies) work with you to set up an affordable budgeting structure that will help you pay down your debt in an efficient way. These types of services help you help yourself, to put it simply, but they don’t lower the amount of debt you owe as do debt settlement companies. However, they may be able to lower your interest rates by negotiating with your creditors.

Could a debt management program be the right choice for you? Ask yourself:

  • Can I afford my current monthly minimum payments?

  • Could I afford to pay a bit more than my current monthly minimum payments?

  • Am I current on at least one of my credit card payments?

If you answered “yes” to all of these questions, then you might be a good candidate for a debt management program. Still, it’s important to understand how these plans work, how to find the right service, and your other options before you decide.

How a debt management program works

Once you’ve selected a credit counseling company, you will have an appointment with a certified credit counselor. First, they will look at your situation to better understand all of your monthly expenses, not just debts. Then you will enroll in a debt management plan that they have custom-designed for you.

Keep in mind that a debt management program will not reduce the amount of your debts. You will pay back 100 percent of your debts plus interest. However, a debt management credit counselor will negotiate with your creditors to get you a lower interest rate—called a “concession rate”—on your debts. Your monthly fees to the debt management company will be based on this new concession rate.

Enrolling in one of these plans could save you money in reduced interest and help consolidate your monthly debts into one payment. It also could help you avoid becoming delinquent on one or more of your accounts or going into collections. As long as you can cover your monthly payments, which can be often higher under the terms of the debt management program, it may be a good option for chipping away at your debt.

However, working with a debt management company could also lower your credit score and negatively impact your ability to open or use additional lines of credit, as some lenders may consider you a risk. Additionally, some or all of your credit card accounts may be closed.

Tips for finding a debt management company

As your finances are serious business, it’s important to find a trusted resource to help with your situation. When researching your options and choosing a debt management program, you’ll want to consider the following:

Industry memberships

Look for memberships in the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA) when researching debt management and credit counseling companies. These affiliations imply an adherence to industry standards and best practices—such as hiring certified credit counselors, submitting to routine audits, and more. If a company isn’t a member of at least one of these, consider it a red flag.

Better Business Bureau accreditation and rating

The Better Business Bureau (BBB) is a non-profit organization that advocates for consumers by promoting trustworthy businesses and calling out the bad ones through a structured accreditation and rating system. Look for a company that has this accreditation and a positive BBB score as well as positive reviews. If a debt management or credit counseling company isn’t accredited by the BBB, ask them why.

Years in business

Like most companies in the financial industry, the longer they have been in business, the more likely they are successful at what they do. Plus, it may take a few years to fully pay off your debt with a debt management program, so you want a company that will be there through the whole process.


Debt management companies may charge a setup fee and monthly fees. State laws typically set a maximum that can be charged; for example, the setup fee and monthly fees in Texas may not be higher than $111 and $56 (respectively). Before you enroll in a plan, ask for a schedule of fees in writing so you can get a full picture of how much you will be paying each month.

Financial education tools

The goal of enrolling in a debt management isn’t just to put this debt behind you—it’s also to ensure that you don’t end up in this situation again. Everyone learns in a different way, so make sure that whatever educational materials the debt management company offers, such as budgeting worksheets, articles, and in-depth brochures, are things you understand and find useful.


Find a company that will listen to you as well as share the hard truth. Reputable debt management companies do not make empty promises. The right company will listen to your concerns and answer questions in an honest, complete manner. You should never feel pressure to enroll. If you are getting that feeling, then step away and continue your search.

Alternatives to debt management programs

Depending on your unique situation and your financial goals, you might decide to take a different path toward improving your financial health. A debt management program is one route toward relieving your debt load, but there are other options you’ll want to consider first. These include (but aren’t limited to) the following:

  • Debt consolidation loans. This method involves taking out a personal loan, ideally one with a lower interest rate than what you’re currently paying on your credit cards and other debt. This can relieve the stress of managing multiple accounts, but it may be difficult to obtain a favorable rate  if you have a low enough credit score.

  • Balance transfer cards. Many credit card companies offer incentives to transfer your existing debt, such as interest rates as low as 0 percent. This can help reduce your overall debt, but these rates only apply for a limited time and you’ll also have to consider the cost of balance transfer fees (typically 3 to 5 percent per transferred card).

  • This is the so-called “nuclear option” for those with insurmountable debt, since it’s typically the debt relief option of last resort. Generally, bankruptcy protection 

    will protect you from the collections process and can eliminate all of your debt, but you also may lose most of your liquid assets and endure long-term damage to your credit.

  • Debt settlement. This debt relief option involves negotiating with your creditors (either yourself or through a debt settlement company) for a lower debt amount. Debt settlement can drastically reduce what you owe and help clear your debts more quickly, but also can temporarily hurt your credit score and expose you to possible lawsuits.

Find the best debt relief plan for your needs

If you’re trying to cope with your with debt, a debt management program may seem attractive — but it’s not your only option. Freedom Debt Relief is here to help you understand your options for dealing with your debt, including our debt relief program. Our Certified Debt Consultants can help you find the right solution for your particular needs. Find out if you qualify right now.