Best Debt Management Plans of 2025

A debt management plan (DMP) is a type of debt relief offered by credit counseling agencies. You’ll repay your entire debt balance at a potentially reduced interest rate or payment amount. You can enroll most types of unsecured debt in a DMP (excluding federal student loans), and it usually takes three to five years to complete.

Since you’ll make timely payments to repay everything you owe with a DMP, your credit score will typically improve over time. In contrast, debt settlement plans will often lower your credit score as you may be asked to make late payments (or stop making payments) and forgiven debt is reflected negatively on your credit report, potentially for many years.

» MORE: What affects your credit score?

DMPs are designed to help you repay all your enrolled debts over a relatively short period of no more than five years. You’ll work with a credit counselor and you can enroll most unsecured debts, like credit cards, personal loans, private student loans and medical bills.

If you sign up for a DMP, this is how it typically works:

1. Get a free financial consultation. You’ll meet with a credit counselor, who will review your finances and offer advice. If you have a lot of unsecured debt, a DMP may be recommended. To sign up, you may need to pay a one-time fee of up to $75.
2. Choose which debts to enroll. You’ll benefit the most by enrolling debt with high interest rates or without structured repayment plans, like credit cards. You can’t enroll secured debt like mortgages and car loans, or federal student loans.
3. Start making payments. Once you’ve enrolled, you’ll begin making a single monthly payment to your credit counseling agency for all your enrolled debts. The agency will take its monthly fee out of your payment and distribute the rest to your creditors.
4. Possibly improve your rates and terms. The credit counseling agency may work with your creditors to negotiate lower monthly payments, reduced interest rates or fee waivers. This can allow you to put more money toward your principal.
5. Pay off everything in full. DMPs typically take three to five years to complete, assuming you make all payments on time and as agreed. If you don’t think you can make the payments, you’re better off not signing up, as the benefits negotiated on your behalf will be voided.

Once you’ve signed up for a DMP, you can often get ongoing support and advice from your credit counselor so you can manage your finances more effectively in the future.

“The credit counselor will continue to work with you over time to monitor your progress and make adjustments to your plan as needed,” said Levon L. Galstyan, a certified public accountant at Oak View Law Group.

If you’re not sure a DMP is right for you, there are alternatives.

Note that you shouldn’t use your 401(k) or other retirement accounts as an alternative. Not only might you have to pay a tax penalty to access these funds, but you may set yourself back from your retirement plans.

Also, you might turn to a debt settlement plan in a worst-case scenario. However, this type of plan is risky because the goal is to settle your debt for less than you owe. While in some cases, debt settlement may be a good alternative to bankruptcy, it’s important to carefully evaluate other alternatives before considering debt settlement.

When choosing a DMP, the first step is to find a credible credit counseling agency. Read reviews, search for any recent legal actions against it and note the certifications held by it or its agents, such as designation as a certified credit counselor.

Also, consider how much you’ll pay in fees, when you pay the fees and the types of services you can receive. You should never be asked to pay for an initial consultation with a credit counselor; this first consultation should be free.

Once you agree to sign up for a DMP, you’ll pay a small enrollment fee of up to $75 and an ongoing monthly fee (also up to $75). State law often dictates the maximum fees these agencies can charge, which your credit counselor should disclose to you.

If the company is unwilling to provide you with disclosures or pressures you to sign up, these could be signs the company isn’t legitimate. You should be given time to consider your options, and the company should be readily able and willing to answer your questions.

ounseling agency is operating a scam or engaging in fraudulent practices, you can file a complaint with either the Federal Trade Commission (FTC) or the Consumer Financial Protection Bureau (CFPB).

To make our top picks for best debt management plans, we collected 24 individual data points from 17 well-known companies. We then compared them on features including:

• Types of debt serviced: We considered the types of debts a credit counseling company works with, and gave higher consideration to those that work with more than credit card debts (e.g., medical debt, payday loans, personal loans).
• Rates and fees: We gave preference to companies with clear rates and easy-to-access information about fees and policies, including money-back guarantees and cancellation policies.
• Accreditations: Since industry accreditations are crucial to a company’s legitimacy, we only considered companies with at least one professional accreditation, and more weight was given to those companies with more than one.
• Availability: Companies that are available to customers in all 50 states were given more consideration for top picks, but we did not exclude those with limited availability (based on other criteria).
• Additional services: We looked at other services a credit counseling company provided, including bankruptcy, housing and/or student loan counseling, veteran and military debt relief, and credit report reviews. Higher weight was given to companies that offer a variety of services, but we did not exclude from consideration companies that only provide credit counseling.
• Debt minimums: More preference was given to companies that had lower debt minimum requirements ($5,000 and below), but we did not exclude companies requiring a higher minimum if they excelled in other areas.

Since customer feedback is a critical indicator when evaluating companies, this was an important consideration when selecting our top picks. However, for those companies on our list with no ratings on ConsumerAffairs, there were other variables that made them stand out as good options for debt relief, and we factored those into our decisions.