A debt management plan is a debt repayment plan that a certified credit counseling agency helps negotiate with your creditors. Setting up a debt management plan requires you to share information about your financial situation and your bills. A qualified credit counselor will very often negotiate with your creditors to get lower interest rates. Some are even able to get your creditors to suspend interest and other fees as long as you are making timely payments through the debt management plan. In exchange, you deposit a fixed amount of money each month with the credit counseling agency, which, in turn, uses the money to pay your creditors. Your credit privileges are also usually suspended for the term of the debt management plan. Some creditors will note on your credit report that you are managing debt using a credit counseling service. However, this is generally viewed as more favorable than negative.
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