A Debt Management Program can give you a structured path to pay off high-interest credit card debt without taking out another loan.
DebtWave works with participating creditors to request repayment terms that may include lower interest rates, reduced monthly payments or other concessions.
Meanwhile, you make one scheduled program payment to DebtWave, and we distribute the appropriate funds to the participating creditors in your plan.
Most importantly, you can review estimated terms before deciding whether a Debt Management Program makes sense for you.
What Is a Debt Management Program?
A Debt Management Program, also called a DMP or debt management plan, helps eligible consumers repay unsecured debt through a structured repayment schedule.
Unlike a debt consolidation loan, a DMP does not replace your credit cards with new financing. Instead, you continue repaying the balances you already owe.
In addition, participating creditors may offer concessions through their current DMP guidelines. Those concessions can include reduced interest rates, lower required payments or reduced fees.
Because creditor policies differ, DebtWave cannot guarantee a particular payment or APR before reviewing your accounts.
Is a Debt Management Program a Debt Consolidation Loan?
No. A Debt Management Program does not require you to borrow money or qualify for a new loan.
However, people sometimes describe a DMP as a form of debt consolidation because it can simplify payments for several participating creditors.
Instead of sending several separate program payments, you make one scheduled payment to DebtWave. We then distribute funds to the creditors included in your plan.
Important: A Debt Management Program does not erase your debt. The goal is to repay enrolled balances through a structured plan while taking advantage of available creditor concessions.
Who May Benefit From a Debt Management Program?
A DMP may help when high interest rates make it difficult to reduce your credit card balances.
For example, you may be making every minimum payment on time while watching most of your money disappear into finance charges.
Likewise, managing several creditors can become stressful when each account has a different APR, due date and minimum payment.
A Debt Management Program May Be Worth Exploring If You:
- Carry several high-interest credit card balances
- Make minimum payments but see little progress
- Want to avoid taking out another consolidation loan
- Can afford a structured monthly repayment amount
- Want help organizing payments to multiple creditors
- Would benefit from a lower APR on eligible accounts
- Want a defined strategy for paying off unsecured debt
What Types of Debt Can Go on a DMP?
Debt Management Programs primarily focus on unsecured debts such as credit cards.
In addition, certain unsecured personal loans or other accounts may qualify when the creditor participates in a DMP.
However, mortgages, most vehicle loans and many other secured debts generally require different repayment solutions.
Therefore, a counselor should review each account before you assume that it can join the program.
How Does a Debt Management Program Work?
Complete Free Credit Counseling
First, a DebtWave counselor reviews your income, household expenses, debts and financial goals.
Review Eligible Accounts
Next, we identify which creditors may participate and review the available repayment guidelines for those accounts.
See Your Estimated Terms
Afterward, you can review estimated creditor APRs, payments, program fees and your projected payoff timeline.
Decide Whether to Enroll
You choose whether the proposed plan fits your budget. Completing counseling does not obligate you to enroll.
Make Your Scheduled Program Payment
If you enroll, you send your scheduled program payment to DebtWave, and we distribute funds to participating creditors.
Work Toward Paying Off Your Debt
Finally, you continue making scheduled payments while your enrolled balances decline according to the program terms.
How Long Does a Debt Management Program Take?
DebtWave programs typically aim to repay enrolled debts within approximately three to five years.
However, your actual payoff period depends on your balances, creditor requirements, interest rates and scheduled payment amount.
In addition, certain creditors now offer longer repayment schedules that can reduce the required payment for qualifying accounts.
Your counselor can provide a more personalized estimate after reviewing your debts.
Estimate Your Debt Management Program Payment & APR
You can get an estimate before speaking with a counselor.
First, choose one of your creditors below. Then enter your balance, current APR and minimum monthly payment.
The calculator will estimate the payment and interest rate that may apply through a Debt Management Program.
Because creditor guidelines change, treat the results as estimates rather than guaranteed terms.
Why Lower Credit Card Interest Can Make a Big Difference
A high APR can cause much of your minimum payment to go toward interest instead of reducing your balance.
Therefore, lowering an eligible account's interest rate can change how quickly your payment attacks principal.
For example, DebtWave's 2024 client data showed an average starting APR of 23.05%. After DMP enrollment, the historical average dropped to 6.83%.
Those figures describe historical results, so your rate may differ based on creditor guidelines and account eligibility.
Could a Debt Management Program Lower Your Payment?
A lower APR can sometimes help reduce the required payment, although not every client receives a lower monthly amount.
In 2024, DebtWave clients included in the company's analysis averaged $915 per month before enrollment.
Meanwhile, the historical average DMP payment was $694, a difference of $221 per month.
However, your payment depends on balances, creditor formulas, eligible accounts and your household budget.
Historical results are not guaranteed. The 2024 APR and payment figures describe past DebtWave client averages. Current creditor terms and individual outcomes may differ.
What Is DebtWave's Debt Management Program Success Rate?
DebtWave reviewed clients who enrolled in its Debt Management Program during the five-year period from 2016 through 2020.
During that period, 14,670 consumers enrolled, and 10,038 successfully completed their program.
As a result, DebtWave calculated a historical completion rate of 68.4%.
Furthermore, consumers have repaid more than $325 million in credit card debt through DebtWave's Debt Management Program since 2001.
*Historical completion data: DebtWave's 68.4% figure covers clients who enrolled from 2016 through 2020. Past results do not guarantee that every client will complete a DMP or achieve the same outcome.
Debt Management Program vs. Debt Settlement
The names sound similar, but Debt Management Programs and debt settlement take very different approaches.
A DMP generally focuses on repaying the balances you owe while participating creditors may reduce interest rates or payments.
By contrast, debt settlement generally seeks to resolve debts for less than the full balance and may involve allowing accounts to become delinquent.
Therefore, compare the risks, costs and credit consequences before choosing either strategy.
| Feature | Debt Management Program | Debt Settlement |
|---|---|---|
| Main Goal | Repay enrolled debt through structured creditor repayment terms | Attempt to settle debts for less than the amount owed |
| New Loan? | No | No |
| Principal Repaid | Generally repays the enrolled principal balance | May seek to settle for less than the full balance |
| Interest | Participating creditors may reduce APRs | Interest and fees may continue while accounts remain unresolved |
| Payment Status | Designed around scheduled creditor payments | Programs may involve allowing accounts to become delinquent |
| Credit Impact | Varies; enrolled revolving accounts generally close | Delinquency and settlement activity can significantly affect credit |
What Does the CFPB Say About Debt Management Plans?
The Consumer Financial Protection Bureau explains that nonprofit credit counselors can help consumers create budgets and organize Debt Management Plans.
According to the CFPB, a DMP may help lower monthly creditor payments, interest charges or fees.
However, the agency also recommends reviewing the organization, its fees and the proposed creditor terms before enrolling.
Therefore, DebtWave provides estimated program information so you can review your options before making a decision.
How Can a Debt Management Program Affect Your Credit?
Simply completing a credit counseling session does not automatically lower your credit score.
However, creditors generally close revolving credit cards that enter a DMP, which can affect available credit and utilization.
Meanwhile, payment history continues to matter. Missing payments before or during enrollment can hurt your credit profile.
Because every credit file differs, DebtWave cannot predict or guarantee how a DMP will affect your individual score.
Can You Keep Using Credit Cards on a DMP?
Creditors generally close or restrict credit cards that enter a Debt Management Program.
Although losing access to enrolled cards can feel inconvenient, closing them also prevents new purchases from increasing those balances.
In some situations, you may keep an account outside the program. However, creditor guidelines and your overall financial plan can affect that decision.
Therefore, discuss any card you believe you must keep before enrollment.
How Much Does a Debt Management Program Cost?
DebtWave may charge an initial setup fee and an ongoing service fee for administering a DMP.
However, fees vary by state, program structure and applicable regulations.
Before you enroll, your counselor will explain the fees that apply to your situation.
Most importantly, compare the total program cost with the potential interest savings rather than focusing on the monthly payment alone.
Potential Benefits of a Debt Management Program
Financial Benefits
- Potentially reduced APRs on eligible accounts
- Possible reduction in required payments
- One scheduled program payment
- Structured repayment timeline
- No new consolidation loan
- More of each payment may reach principal
Support & Organization
- Free initial credit counseling
- Personalized budget review
- Estimated creditor terms before enrollment
- Payment distribution to participating creditors
- Financial education resources
- Support throughout your repayment plan
When Might a DMP Not Be the Right Fit?
A Debt Management Program requires enough income to make the scheduled payment consistently.
Therefore, a DMP may not work when your essential household expenses already exceed your income.
Likewise, the program may provide limited benefit if most of your debt consists of mortgages, vehicle loans or other accounts that do not qualify.
In those situations, a counselor can discuss other options and resources that may deserve consideration.
What Should You Gather Before Credit Counseling?
You can make your financial review more useful by gathering a few basic numbers before speaking with a counselor.
Helpful Information Includes:
- Current credit card balances
- Interest rates or APRs
- Minimum monthly payments
- Household take-home income
- Mortgage or rent
- Vehicle and transportation expenses
- Insurance and utilities
- Other recurring debt payments
Don't worry if you cannot find every number. A counselor can still begin the review and help you identify the information you need.
See What a Debt Management Program Could Do for You
High-interest credit card debt can make it feel like your balances never move.
Instead of guessing, use our free calculator to estimate the payment and APR that may apply to one of your creditors.
No new loan. Free estimate. No obligation to enroll.
Frequently Asked Questions About Debt Management Programs
What is a Debt Management Program?
A Debt Management Program is a structured repayment plan for eligible unsecured debt. You make a scheduled payment to a credit counseling organization, which distributes funds to participating creditors. In addition, creditors may provide reduced APRs, payments or other concessions.
Is a Debt Management Program a loan?
No. A DMP does not provide new financing or replace your credit cards with another loan. Instead, you repay your existing eligible debts through a structured program.
How long does a DMP usually take?
DebtWave programs typically aim to repay enrolled debt within about three to five years. However, the actual timeline depends on your balances, creditor terms, interest rates and scheduled payment.
Can a DMP lower my credit card APR?
Participating creditors may reduce interest rates under their current DMP guidelines. However, DebtWave cannot guarantee a specific APR because each creditor determines its own terms.
Can a Debt Management Program lower my payment?
It may. Reduced interest rates or creditor payment formulas can lower required payments for some consumers. Nevertheless, your result depends on balances, creditors and program eligibility.
DMP Eligibility, Credit and Enrollment Questions
Do I have to be behind on my payments?
No. In fact, seeking help while your accounts remain current may give you more options. Therefore, you do not need to wait until you miss payments before contacting DebtWave.
Will my credit cards close?
Creditors generally close or restrict revolving accounts included in a DMP. As a result, you should plan to stop using enrolled cards once the program begins.
Will a Debt Management Program hurt my credit?
The effect varies by consumer. Closing enrolled accounts can affect credit utilization, while payment history and declining balances also influence your credit profile. Therefore, no specific credit-score outcome can be guaranteed.
Can I pay extra while on a DMP?
Generally, you can pay additional amounts toward enrolled debts. In addition, paying more than the required amount may help you finish sooner when creditors apply the extra funds correctly.
Am I required to enroll after counseling?
No. Credit counseling helps you understand your finances and possible options. Afterward, you decide whether a Debt Management Program fits your needs.
Take the First Step Toward Becoming Debt-Free
You do not have to commit to a program before seeing what your numbers might look like.
First, estimate your possible payment and APR with our free calculator. Then, speak with a counselor if you want a complete review of your debts and household budget.