What Is a Debt Management Program?
A debt management program is designed to get you out of debt more quickly than you could on your own. Typically, these programs lower your interest rate and monthly payment, so more of your payment goes toward reducing your debt. Debt Management Programs are administered by organizations called credit counseling agencies (also known as a CCA).

How Will a Debt Management Program Help You?
A debt management program is a proven plan to get you out of debt. It allows you to make a single monthly payment that is distributed to your creditors. This eliminates the need to make individual payments to each of your creditors. Many of the creditors who participate in the program will allow you to reduce your monthly payment and, after you establish a payment history, may reduce or eliminate interest and late charges, and harassing collection calls should stop. That way, more of your payment goes to reducing your debt, getting you out of debt faster.

Will a Debt Management Program Stop Collection Calls?
Collection calls usually stop after the third consecutive payment on the debt management program. If you continue to receive collection calls after your creditor has posted three consecutive payments, you should contact your debt management program to allow them an opportunity to investigate. Something to keep in mind, your creditors are often large, complex organizations; sometimes the department that is calling you has not been notified about your enrollment status.

How Will a Debt Management Program Affect Your Credit?
If your credit report already reflects any late or missed payments, then the debt management plan will likely improve your record by facilitating consistent, on-time monthly payments. Also, if you were late in the past, many creditors will report you as "current" as long as you make all of your monthly payments on time. If you have never missed a payment, then sending reduced payments to creditors or getting interest concessions through the debt management program could put a blemish on your credit report. A creditor may report a reduced payment as "late" or reflect that payments are being administered by a credit counseling agency. Since the plan objective is to help you get out of debt, lenders may avoid issuing new credit cards until you have completed or withdrawn from the plan.

How Much Will The Debt Management Program Cost You?
Your costs may vary based on state regulations and the number of creditors you place on the program. Clients typically pay a nominal set-up cost to cover the expense of account activation, and a monthly servicing cost to cover recurring expenses.