A Comprehensive Guide to Debt Management Programs 

The burden of debt. So many of us live with it.

It can be an emotionally draining companion. In the back of your mind, you think about how much you owe. The feelings that accompany it can range from feeling trapped, ashamed, and confused.

The stress of debt can be simply overwhelming.

But there’s hope. Your debt is manageable with a plan and support, especially with a debt management program (DMP) through a trustworthy nonprofit organization whose goal is to serve you.

Here we will explore what a DMP is, as well as present other possibilities you can consider. Let’s start with some helpful data and definitions.

Consumer Debt: What the Data Says

First, it’s important to acknowledge that you’re not alone.

Nearly half of Americans in a study reported living paycheck to paycheck in late 2024, while the average credit card debt per American is around $6,434 as of May 2025. Add to that a recent report that led the Consumer Financial Protection Bureau to say that “credit cards have never been this expensive.”

Also, 27% of Americans had trouble paying for medical care for themselves or their family, according to a 2025 study by the Pew Research Center. It’s not surprising that the headline of the study says, “the growing share of U.S. adults say their personal finances will be worse a year from now.”

Meanwhile, life is happening.

Honest people are trying to make ends meet while enduring job loss, divorce, an expensive medical procedure, and more. These are stressful enough without the added burden of debt.

So if you’re one of the many feeling overwhelmed by debt, it’s completely understandable.

Now that we’ve addressed this widespread problem, let’s understand the two kinds of debt you could be facing.

Priority vs. Non-Priority Debts

It’s essential to understand the difference between:

• Priority debts can lead to immediate harm if left unpaid (such as eviction or repossession). They include your mortgage, rent, utilities, car payments, taxes, and child support.
• Non-priority debts include credit card bills, medical expenses, and loan payments. These debts are often included within the debt management program (like what we offer at GreenPathGreenPath). 

At GreenPath we specialize in assisting you with your non-priority debt but can also help with your entire budget.  

We want to reassure you that there’s nothing wrong with needing help in knowing where your money needs to go. We know how daunting it can be, and we’re here to assist you every step of the way—whether it’s debt counseling or your overall financial picture.

Let’s now explore your options for getting out of debt, beginning with one of the most effective: the DMP.

What Is a Debt Management Program?

Simply put, a debt management program (DMP) is a structured plan to repay unsecured debts (non-priority debts), usually through a nonprofit credit counseling agency like GreenPath.

When someone enrolls in a DMP, they receive a personalized monthly payment plan—a roadmap for paying off debts in full. After enrollment, GreenPath works with creditors to request concessions like lower interest rates and waived fees.

After a supportive counseling session, your plan is customized to you. Once enrolled, your client success team guides you as you work through your plan (and not as a debt collector).

It’s important to note that a DMP is not a debt consolidation or loan.

Rather, it’s a repayment program with some concessions that the DMP provider arranges with creditors on your behalf (such as lower interest and waived fees).

We’ll be the first to tell you that a DMP is not a “quick fix.” It’s a long-term path toward becoming debt-free.

And it works.

Who Is a Debt Management Program For?

Great question! DMP candidates include people who are:

• Making minimum payments but feeling stuck.
• Enduring high interest charges on credit cards or personal loans. 
• Receiving collections notices for medical bills and other “non-priority debts”. 
• Overwhelmed by multiple debt balances. 

If you think a DMP may be right for you, consider these questions. Are you: 

• Juggling multiple unsecured debts (such as credit cards, loans, and medical bills)? 
• Struggling to keep up with minimum payments? 
• Experiencing harassment from creditors? 
• Being denied when applying for loans or credit cards? 
• Trying to avoid bankruptcy (or are ineligible for it)? 
• Burdened with debt from a divorcedebt from a divorce? 

If you answered “yes” to any of these, enrolling in a DMP may be for you. But let’s take a closer look at the benefits first. 

Benefits of a Debt Management Program 

Having worked with many people just like you, we understand how stressful and debilitating debt can be. But with a little structure and support, peace of mind can be yours.

Here are the benefits many have experienced with the help of a DMP:

• Lower rates: Have a little more money at the end of the month with reduced interest rates (that GreenPath may be able to arrange with your creditors). 
• Waived fees: Relieve the pressure of those fees that may be pressing down on you now. In some cases, creditors may waive late or over-limit fees. 
• No collections: Lessen the stress of talking to collectors as we arrange repayment on your behalf. 
• Credit impact over time: While credit scores may dip early in a debt management program, many clients see gradual improvement over time as consistent, on-time payments are made. 
• Clear timeline: See the light at the end of the tunnel! Our clients with a DMP are usually debt-free within 3 to 5 years. 
• Ongoing support: Never feel alone in your journey toward debt relief. You’ll have ongoing support and accountability from a client success specialist who cares. 

As great as DMPs are, we want you to know what your other options are. So, let’s cover those next. 

Debt Management Program vs. Alternative Options 

How do DMPs compare to other options? 

While we’re confident that they’re the safest and most supportive choice, we’re first and foremost committed to serving your unique needs. That’s why we want to give you a clear overview of your other choices so that you can make the best decision for yourself. 

DIY Approach 

A popular do-it-yourself approach to debt relief is the “avalanche” or “snowball” method.  

Snowball Method: You pay off debts from smallest to largest balance, regardless of interest rate. 

• Pros: Simple and motivating—knocking out small debts quickly gives a sense of momentum. 
• Cons: It ignores interest rates, so you may end up paying more over time if high-interest debts are left for later. 

Avalanche Method: You pay off debts from highest to lowest interest rate, regardless of balance. 

• Pros: Saves money on interest in the long run. 
• Cons: Progress may feel slower, especially if your highest-interest debts are also the largest. 

Neither method involves creditor arrangements, so you may still face collection calls or fees while working your plan. 

Debt Consolidation Loan 

It’s all in the name. This is about combining all of your debtscombining all of your debts into a single loan payment and rate. 

• Pros: Having all debt payments in one gets rid of that chaotic feeling that goes with multiple debts—a relief for sure. It may also offer a lower rate and payment. Also, you can improve your credit score with on-time payments. 
• Cons: Sometimes you’ll need to have a good credit score to get a decent rate. There can also be up-front fees, depending on the lender. And while your monthly payments may be lower, this could lead to you paying a lot more in interest over time. 

Balance Transfer Card 

A credit card to which other credit card debt can be transferred.

• Pros: Another consolidation option (at least for credit cards). They often include a 0% or low-rate introductory APR, so any payments you make during that time reduces the principal balance. This is also a credit score-building method if you stay on top of your payments. Plus, no collateral is needed.
• Cons: There’s usually an up-front fee for transferring your balance (3 to 5%). Sometimes the credit limit on the card is too low to cover all your debt. After the introductory period, the rate usually jumps by a lot. Even missing a single payment can trigger a higher rate with some cards.

Debt Settlement 

An agreement between you and creditors to settle your debt for a lower amount—usually a single lump sum payment.

• Pros: A debt settlement company may negotiate with your creditors to reduce the total amount you owe. If successful, this can reduce your overall debt burden and help you resolve debts more quickly than some other options. It may help you avoid bankruptcy or legal action—though this isn’t guaranteed.
• Cons: Causes major damage to your credit score, as interest and fees can accrue during the negotiation period. There is also no guarantee negotiations will succeed—completion rates range from 35% to 60%. Fees can be high, charging 15% to 25% of enrolled debt. Also, watch out: the debt settlement industry can be predatory, often citing “quick” or “instant” fixes that can hurt your long-term financial stability.  

Bankruptcy 

This process entails working with a lawyer to seek legal relief from debt. Bankruptcy typically includes a court-supervised plan that results in making payments or liquidating assets. However, bankruptcy should always be a last resortbankruptcy should always be a last resort.

• Pros: It’ll reduce or eliminate those non-priority (unsecured) debts we mentioned earlier. Simply filing stops most collections—including collectors contacting you. You can also keep certain assets in some cases.
• Cons: It’s costly in so many ways. You’ll probably have to pay legal fees. It’ll also cause serious damage to your credit that can stay on your report for up to 10 years. Even after that, you could have difficulty borrowing again or getting a reasonable interest rate. It might not cover all your debt, and you may have to liquidate assets as part of your court order.

We hope that gives you a clear sense of your debt relief options.

Since we believe DMPs are the best way to go for most, we’re going to pivot back to them. You’d be right to be wondering at this point, “how does a debt management program work?”

How a Debt Management Program Works

First, you’ll need to choose a reputable DMP provider (such as GreenPath—we’ll get more into that in a moment). Once that’s done, here’s what to expect: 

Step 1: Free Debt Counseling Session 

You’re in good hands. You’ll speak with a certified financial counselor to review your income, debts, and financial situation. 

Step 2: Recommendation 

You’ll be guided. Based on your financial picture, your counselor will determine if a DMP is a good fit. If not, you’ll still receive guidance and tools to help you move forward with confidence. 

Step 3: Enrollment and First Payment 

You’re ready to get started! You’ll make one monthly payment to your DMP provider, which they distribute to your creditors. 

Step 4: Creditor Outreach 

You can relax. Your DMP provider will reach out to your creditors to request reduced interest rates, waived fees, and more manageable terms. 

Step 5: Ongoing Encouragement 

You have the support you need and deserve. Need to adjust your plan? You’ll have continuous access to client success specialists, educational resources, worksheets, and other tools designed to help you stay on track.  

Step 6: Graduation and Debt-Free Life 

You did it! Most people complete their program in 3 to 5 years. With your debts paid in full, your credit is on a more stable footing. Congratulations!

See? It’s a straightforward process once you start. But first…

How To Choose a Debt Management Partner

When choosing a DMP, you deserve a partner that works in your best interest. 

Here’s a valuable checklist to help you find one. This separates legitimate nonprofits who care from high-fee alternatives—and even scams: 

Accreditation 

Look for organizations accredited by the NFCC (National Foundation for Credit Counseling) or COA (Council on Accreditation), which ensure ethical practices and transparency. Additionally, ISO certification reflects high standards for quality, service, and continuous improvement. 

Nonprofit 

Nonprofits like GreenPath are mission-driven, not profit-driven. Their goal should be to help you, not make money off your hardship. 

Reviews

Testimonials and success stories can help you feel confident. Look for feedback from people who have had similar debt situations. Be on the lookout for fake reviews (indicators include “too generic” and/or were posted in clusters at the same time). 

Experience

Choose a partner with a proven record of accomplishment. Look for decades of experience and a history of helping people reduce and eliminate debt—not a company that just popped up last year.

Support 

A good partner will offer counseling up front and support throughout your debt management program. They should be positive, hold you gently accountable, and help you address any doubts.  

Transparency

Look for organizations that are up front about their fees (which should be affordable) and offer ongoing education and support. They should not pressure or shame you in any way.

How Does GreenPath Measure Up?

We do all of the above and more!

Since 1961, we’ve been a trusted, national nonprofit helping people like you take control of their debt. We’re accredited, transparent, and known for compassionate support. Just look at our reviews or talk to one of our counselors—you’ll feel the difference from the first call.

We’re proud to have been named a “Best of 2024” by Forbes Advisor. We’ve also been featured by the likes of NerdWallet, Time, and other respected media outletsrespected media outlets. But what really lights us up is what our clients saywhat our clients say about us:

“The overall process was painless. They did a lot to reduce interest rates, and it made it manageable to pay off a great deal of debt.” (Vincent, Valley Stream New York)

“A memorable aspect of my experience was the transparency and willingness of the team to customize plans to fit individual needs. Over the duration of my plan, I managed to pay off a significant amount of credit card debt with their guidance and support.” (Chelsea, Chaska, MN)

“GreenPath made me hopeful that there are still places that are honest and helpful. Thank you so much for being there with me to ensure I accomplish my debt-free journey.” (Emily, Ontario, CA) 

“The communication with GreenPath was exceptional. They clearly laid out each step and were understanding of my needs, especially when unexpected challenges arose. They were willing to adjust payments based on my financial situation, assisting me steadily with understanding and flexibility.” (Evol, Wilmington, DE) 

(All reviews via ConsumerAffairs.com)

We believe in our clients 100% and love nothing more than seeing you succeed.

Your journey toward freedom from debt starts with a simple conversation. Contact usContact us now to get started.

Or explore our Debt Management Program onlineexplore our Debt Management Program online. 

A Brief Word on DMPs and Credit 

How does a DMP affect your credit score, if at all? 

Allow us to address this elephant in the room: a DMP may initially affect your credit if accounts are closed, but over time it can help by reducing balances and ensuring on-time payments.

A DMP does not damage your credit the way a debt settlement or bankruptcy might.

Credit improvement is a long game where a DMP may be a part of the process. For many, it’s a necessary first step to rebuilding a good credit history. 

DIY Debt Management vs. Partnering with a Nonprofit

Do-it-yourself debt payoff is possible but can be very challenging. It takes discipline, organization, and often the ability to negotiate with creditors. It can even be a lonely journey if you don’t have accountability and support around you.

But you don’t have to go alone.

With a nonprofit like GreenPath, you have the structure, support, and creditor concessions many people need. We’ll work with you as a team to manage your debt repayment and help you achieve your financial goals. In addition to the checklist above, you’ll also get:

• 24/7 online financial education
• A client portal allowing you to connect with your client success team, track your progress, and reach out with questions or concerns
• Exclusive access to an online community of other DMP clients on a similar journey

And remember that, as a nonprofit, we exist to serve you—not make money on your hardship.

If you have any questions, we’ve provided a helpful FAQ below.

FAQs on Debt Management Programs

We want to end this guide with frequently asked questions and answers. If you decide you’d like to explore a DMP as your debt management solution, we’re here for you!

How much does a debt management program cost?

The monthly payment on the debt management programdebt management program includes an average monthly fee of $31. Fees are determined based on applicable state law and may also include an enrollment fee. This is minimal considering the amount of money our clients typically save in waived late fees, over-limit fees, and reduced credit card interest charges. 

Do I have to sign a contract to begin a DMP?

There’s an agreement you sign when starting your DMP. It specifies the program details and gives us permission to pay your creditors on your behalf. The agreement is not a binding contract, and you can cancel the program at any time. 

Which creditors do you work with?

We work with more than 550 creditors throughout the U.S., including banks, credit unions, retailers, medical providers, and collection agencies.

Can I still use my credit cards while on a DMP?

Since the goal is to pay off debt, the credit cards included in the program will be closed. You can usually continue using one card for emergencies.

Can I use credit while on a DMP?

Most people stop using credit during a DMP, and some creditors require it. But the tradeoff is regaining control, reducing stress, and rebuilding long-term credit health.

Can I reduce my monthly fee and keep my lower interest rate if I remove a debt from my DMP and pay the creditor directly?

If you decide to keep your DMP open but remove one of your debts to pay the creditor directly, the creditor typically will not keep the same terms in place.

When the creditor sees that payments are no longer coming from a DMP, they usually change the annual percentage rate (APR) back to the original and recalculate a new minimum monthly payment for you.  

Sometimes creditors will offer a lower APR for a limited time (6 to 12 months), whereas the DMP is for 60 months (about 5 years). 

Does GreenPath work for banks?

GreenPath is a neutral third party that works in your best interest. Many creditors support our work because they believe it results in positive, long-term outcomes.

Can I include medical bills or payday loans in a DMP?

Yes, in many cases. While DMPs typically focus on unsecured debts like credit cards, some medical bills or payday loans may be eligible. Your counselor will help assess.

What if I miss a payment while on a DMP?

Life happens. If you anticipate a missed payment, contact your client success specialist immediately. They’ll work with you to explore adjustments and avoid program removal.

Can I still qualify if I have a low income or am recently unemployed?

Yes! Our counselors will assess your full financial picture. If a DMP isn’t the right fit due to income constraints, they can help you explore alternatives or support resources that match your situation.

Is there a fee to enroll in a DMP?

Yes, but it’s modest and based on your state and financial situation. GreenPath is a nonprofit, and fees are regulated. Fees typically include a small enrollment fee and a monthly service fee. All fees will be disclosed up front with no surprises. 

Will my creditors know I’m in a DMP?

Yes, your creditors are notified and directly involved in the program—but this is a good thing. It opens the door to better repayment terms and stops negative activity like late fees or collections in many cases.

How long does a typical DMP last?

Most DMPs are designed to be completed within 3 to 5 years, depending on your total debt and monthly payment capacity. We work with you to find a timeline that’s realistic and sustainable, so you’re not overburdened.

Can I pay off my DMP early if my situation improves?

Absolutely! There’s no penalty for early repayment. If your financial situation improves, we can help you accelerate your payments and reach your debt-free goal even faster.

Can I contact someone at GreenPath if I have questions or concerns about my DMP?

Certainly! We have a dedicated Client Success Team able to assist with any questions or concerns you may have. We also periodically reach out to see how you’re doing.

Let Go of the Burden of Debt

Debt is personal, but the negative feelings it creates are shared by many. 

The good news is that there are ways to get rid of those feelings, by making debt manageable. While there are a few ways that can help you work through your debt, a debt management program is one of the best tools at your disposal. 

At GreenPath, we’re committed to helping people live a stress-free financial life. That’s why we offer DMPs—and so much more. 

Get in touch with usGet in touch with us and learn more about how we can help you. 

Explore Our Debt Management ProgramExplore Our Debt Management Program