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Debt Management Plans & Programs

For those with considerable debt problems, a financial counseling session is an effective first step toward learning to manage your finances better. If appropriate, entering into a Debt Management Plan (DMP) administered by a nonprofit NFCC member agency can also start you on the road to a financially stable, debt-free life.


How It Works

Debt management programs serve the dual role of helping you repay your debts while creditors receive the money owed to them. These debt management plans are a systematic way to pay down your outstanding debt through monthly payments to your credit counseling agency. Your creditor accounts will always be credited with 100 percent of the amount you pay through an NFCC agency. By participating in this type of debt management program, you may benefit from reduced or waived finance charges or fees, and experience fewer collection calls. When you have completed your payments-which typically takes 36-60 months- it may help you reestablish credit.


Click here to schedule an appointment with an NFCC certified credit counselor


Frequently Asked Questions

What is a Debt Management Plan (DMP)?

A DMP sets up a payment schedule for you to repay your debts. By voluntary agreement you deposit funds with your credit counseling agency each month. They send those funds directly to your creditors. If collectors call, you can ask them to contact the agency you are working with.

You may also receive a reduction or waiver in finance and/or other charges. When you have completed your payments the agency will assist you in reestablishing credit.

DMP serves the dual role of:

  • Helping you repay your debt.
  • Helping creditors to receive the money owed to them.

How will a DMP affect my credit?

Your participation in a DMP may change information that is already on your credit report. If your credit report reflects that you have paid creditors as agreed in the past, a DMP could have a negative impact on a creditworthiness decision by a potential creditor, landlord, or employer because it is an indicator that you are or have experienced financial difficulties.

In addition, creditors may report that you are on a DMP and are not paying as originally agreed although they have accepted the reduced payment. Creditors have different credit reporting policies, and a Certified Consumer Credit Counselor can answer your questions about the possible effect on your credit rating.

But remember, the goal of the DMP is to develop a plan to ultimately improve your financial and credit standing.

If I enroll in a DMP can I continue to use my credit cards?

No. As a rule, your creditors will close or suspend your lines of credit. In limited cases (for example if your employer requires you to travel) one credit card may be maintained.

When you complete the DMP some creditors may reestablish your credit based on your current ability to pay and your payment history while enrolled in the plan.