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Can I Ditch Golden State Debt Management and Save Money? – Art

Written by Steve Rhode

“Dear Steve,

I am using the Consumer Credit Counseling program with Golden State Debt Management. It involves me allowing them to deduct $625 per month from my checking account.

In total, they keep about $125 in fees each month. High. But even including those fees, I’m still saving $90 / month versus the astronomical interest I was paying before. (The interest rate is 9.8% now from the 2 credit card companies in the program).

I realize that as time goes on and my balances decline, there will come a day when my savings from lower interest charges will be less than the fixed fees I am paying.

At that time I will be better off to just pay the card companies directly.

My question is, what are the chances that if I start quietly paying the credit card companies directly each month (bypassing the GSDM company) that they will leave the interest rate low? Any thoughts? THANKS!


Dear Art,

A credit counseling program traditionally lasts about 60 months these days. If you are paying $125 a month in fees then the program will cost you $7,500 you could use towards your debt.

If Golden State Debt Management is doing a great job for you and you see value in the service they provide and you are willing to pay that fee, stick with them.

processIf you wanted to explore alternatives others have reported being able to continue making payments directly to creditors but the safest thing to do would be for you to pick up the phone and call your creditors to ask about continuing with your payments on whatever internal payment program they might offer.

Sometimes creditors do have internal programs that offer even better terms. It is certainly worth asking. And by asking you can come up with a plan that has the best shot at working and making for a smooth transition if that’s what you decide to do.

The bottom line is they are your creditors and you should feel free to communicate with them and come up with a plan that makes the most economic sense for you.

If you want to know how big of a deal $125 a month is, use my credit counseling calculator below to learn how much this will cost you in the long run.

Please post your responses and follow-up messages to me on this in the comments section below.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

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.

1 Comment

  • Hi Steve,
    Thanks for your quick response. Well, I tried calling my creditors before enrolling with Golden State. They weren’t very cooperative — to put it mildly. Basically, all they would do was shuttle me off to their bankruptcy counseling partner. Also, last fall I simply didn’t have the money to make payments one month, so I had Golden State cancel that month’s payment. When I later called the credit card companies to discuss getting up to data, it took – literally – half an hour to get to someone who told me to just send them the payment. So, I could try calling them as you suggest, but I confess to not having much hope there! But I might try anyway.

    But thanks for your ideas!

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