How Debt Management Programs Work

Debt management companies are businesses that help you manage your debt by
collecting your monthly debt payment and distributing it to your creditors. Usually a
monthly service or administrative fee is taken out of your payment and kept by the debt
management company.
Debt management companies put you on a debt management program or debt
management plan. The company works with your creditors to lower your interest rate and
minimum payment to develop your debt management program. These programs typically
last 4-5 years. By the time you complete your debt management
program your debt will be completely paid off.
Debt management companies are sometimes known as consumer
credit counseling agencies. You can locate one in your area by
visiting the National Foundation for Credit Counseling’s website or
calling 1-800-388-2227. When you’re considering a debt
management company, check out the Better Business Bureau listing.
Make sure any negative issues have been resolved.

Choosing a Reputable Debt Management Company

Even though there is a lot of advice against debt management companies, there are some
reputable companies out there. A good company will help educate you about your
finances and counsel you on your debt rather than push you to sign up for a debt
management program. The Federal Trade Commission advises you to get information
from debt management companies before enrolling in their services.

• • Find out what services the company offers. They

should have more than just debt management
programs. Services should include things like budget
training and debt management coaching.
• Make sure the company is licensed in your state.
• The company you choose should offer free
education.
• Avoid companies who push you into signing a
contract for their services. Make sure you get
agreements in writing and review them before signing
up for services.
• Find out what fees the company charges.

Debt Management Company Alternatives

You may wonder if you even need a debt management program is right for you. There are
a few alternatives that you can choose from.
• Debt consolidation can reduce your monthly debt payments by combining all your debts
into one and paying them off with a loan.
• With debt settlement, you negotiate a lower payment to your creditors. Debt settlement
could hurt your credit score since many creditors won’t settle unless you’re behind on
your payments.
• Bankruptcy is the last resort and should only be considered when none of the other
options work.
Video: Debt Management - Understanding Your Credit Reports

How to Recognize a Scam

There are a lot of debt management companies out there whose only intent is to scam you
out of your money. These companies collect your payments but never distribute them to
your creditors, causing your bills to fall behind and your credit score to plummet. Here
are some warning signs of a debt management company scam.

• • The company that tells you to stop paying your

bills, but doesn’t say when it will start paying.
Reputable debt management companies send
your payments to your creditors as soon as you
enter a debt management program. Always make
sure your creditors are receiving payment and
stop the program if they’re not. After all, it’s your
credit that’s on the line.
• Promises to delete accurately reported information from your credit report. Debt
management companies don’t have any more ability to remove accurate
information from your credit report than you do.
• There is no a written agreement. You need to have a written copy of the services
the debt management company promises to provide along with a breakdown of
how your payment will be used. If you can’t get this from a company, move on.

Debt Management Companies to Choose From

Here is a list of debt management companies that can help you work out a debt
management plan with your creditors.
PAFS Credit Counseling
2815 2nd Avenue, Suite 280
Seattle, WA 98121
(206) 374-8839
Alliance Credit Counseling, Inc.
Suite 100
13777 Ballantyne Corporate Place
Charlotte, NC 28277
(704) 943-0332
American Consumer Credit Counseling, Inc.
130 Rumford Ave, Ste 202
Newton, MA 02466
(617) 559-5700
American Debt Resources, Inc
248C Larkfield Road
East Northport, NY 11731
(631) 912-9542
American Debt Solutions, Inc.
902 Clint Moore Rd., Suite 104
Boca Raton, FL 33487
(800) 246-4019
Cambridge Credit Counseling Corp.
67 Hunt Street
Agawam, MA 01001
(413) 821-6919
CareOne Services, Inc.
8930 Stanford Boulevard
Columbia, MD 21045
(410) 910-2774
ClearPoint Financial Solutions, Inc.
8000 Franklin Farms Drive
Richmond, VA 23229
(804) 222-4660
Consolidated Credit Counseling Services, Inc.
5701 W. Sunrise Blvd.
Ft. Lauderdale, FL 33313
(954) 484-3328
Consumer Credit Counseling Services of Greater Atlanta, Inc.
100 Edgewood Avenue, N.E. Suite 1800
Atlanta, GA 30303
(404) 527-7630
Consumer Education Services, Inc.
3801 Lake Boone Trail, Suite 400
Raleigh, NC 27607
(919) 785-0725
Consumers Alliance Processing Corporation #2
5937 Darwin Court #109
Carlsbad, CA 92008
(888) 533-3016
Credit Advisors, Inc.
1850 South 72nd St.
Omaha, NE 68124
(402) 926-2144
CreditGuard of America, Inc.
791 Park of Commerce Blvd #500
Boca Raton, FL 33487
(561) 241-5843
Debt Counseling Corp.
3033 Express Dr. N. Suite 103
Hauppauge, NY 11749
(631) 582-4300
Family Credit Management Services
4304-06 Charles Street
Rockford, IL 61108
(815) 484-1600
Family Financial Education Foundation
724 Front St Ste 340
Evanston, WY 82930
(307) 789-2010
Family Life Credit Services
2345 Meadow Ridge Pkwy.
West Fargo, ND 58078
(800) 747-9307
Greenpath Debt Solutions
38505 Country Club Drive, Suite 210
Farmington Hills, MI 48331
(248) 553-5400
InCharge Debt Solutions
2101 Park Center Drive, Suite 320
Orlando, FL 32835
(407) 291-7770
Lighthouse Credit Foundation, Inc.
2300 Tall Pines Dr., Suite 120
Largo, FL 33771
(727) 535-9653
Money Management International, Inc. #1
13430 North Black Canyon Hwy., Ste 250
Phoenix, AZ 85029
(602) 246-2227
Money Management International, Inc. #2
DBA: Consumer Credit Counseling Services Southwest
13430 North Black Canyon Hwy., Ste 250
Phoenix, AZ 85029
(602) 247-2227
National Foundation for Debt Management, Inc.
14104 58th Street North
Clearwater, FL 33760
(800) 344-5153
Pioneer Credit & Debt Consolidation Services
1644 Concourse Drive
Rapid City, SD 57703
(605) 348-1608
Springboard Nonprofit Consumer Credit Management, Inc.
4351 Latham Street
Riverside, CA 92517-5438
(951) 781-0114
Take Charge America, Inc.
20620 North 19th Avenue
Phoenix, AZ 85027-3585
(623) 266-6100
Visual Credit Counseling, Inc.
1870 W. Prince Road, #39
Tucson, AZ 85705
(520) 650-6144