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What is Debt Management?

A debt management program’s goal is to allow you to pay back your debt without monthly interest or other fees tacked on by your creditors. Like debt settlement, only unsecured debts such as credit card bills, some student loans, and medical bills, are eligible.

How Does it Work?

A debt management company will work with you to create a repayment program. This will require you to pay off your principle balance in full, which could take up to 5 years or more. During this time, you may be asked to refrain from using credit, applying for additional credit, or you may be required to close your credit accounts altogether.

Debt management companies may also charge an enrollment fee along with a monthly maintenance fee.

Does it Affect My Credit?

After enrolling in a debt management program, your credit report will have a DMP mark next to any debts under debt management. It stands for Debt Management Program. This shows that you broke the terms of your original account and paid at a reduced rate.

It may also take a month or more for your creditors to receive your payment. Most debtors will not be able to afford what is called a “double payment,” one made to the debt management company, and the other directly to the creditors.

The double payment may be for the first two months of the debt management program, which means your debts will be hit with a late mark on your credit report.

debt management

Is This the Best Option?

Like other debt relief solutions, debt management has pros and cons and you must make the right choice for yourself.

If debt management isn't right for you, then look into our debt settlement options.


May help you budget your expenses better since the payments are monthly.

Pay off your debts without interest.


The repayment plan can take up to 5 years.

You have to pay off your entire balance in full.

You may lose usage and access to credit accounts, which may negatively affect your credit score.

Enrollment and monthly fees charged by the debt management company may be costly depending on the length of the repayment plan (usually 3-5 years).

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