Credit Counseling

I’d Like Some Advice About Getting Into a Debt Management Plan

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Written by Steve Rhode


Dear Steve,

Single mother making $62,000 a year but recently had to rely on my credit cards due to a change in employers. I currently have $23,000 in credit card debt and looking to consolidate into one payment with a lower interest rate.

I reviewed your debt management calculator and would like help with a debt management plan. I currently pay $1,052 per month on all credit cards combined, according to a debt relief company.

However, at least one credit card I pay the balance in full every month. With the remaining cards, I always try to pay double the minimum payment.

Could you explain this debt management plan: how it works, who controls the funds, and all your expertise.



Dear Angela,

I think you are referring to this calculator.

The calculator is designed to give you a comparison between different common solutions for debt. Traditionally, a Debt Management Plan (DMP) is a credit counseling program.

I think you need to back the bus up a bit. The best goal is not to pick the plan first but to pick the best plan based on your situation and goals.

A credit counseling DMP will give you one payment each month and feel like you’ve consolidated your debt.

To better understand how credit counseling works, there is this post.

From what you’ve shared, it’s not clear if a credit counseling program your only solution. You could also look at a true debt consolidation loan and pay off your cards and make one loan payment.

But if your credit is not awesome, you could also just prioritize repaying your debt to pay the least amount of interest by considering this repayment strategy.

I understand your desire to extinguish this debt. But in getting out of debt I’d like for you to not brush aside savings. You should be maximizing your matching funds in any 401(k) plan or continuing to build your savings as you pay off the old debt.

READ  Less Than Full Balance Plans and the Problems They Create for Credit Counselors

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


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