debt counseling services
Getting out of debt

Debt Counseling Services: A Guide to Managing Debt 




Debt counseling services provide professional guidance to help individuals deal with overwhelming unsecured debt and get back on the path to financial stability. With the debt counseling services of reputable non-profit credit counseling agencies, you can overcome debt through counseling, education, budgeting assistance and tailored debt management plans.

An Overview of Debt Counseling Services

  • Debt counseling services employ certified credit counselors to provide customized guidance based on your unique financial situation. They can help with:
    • Budgeting and money management skills
    • Advice on prioritizing and repaying debts
    • Negotiating with creditors for lower interest rates and waived fees
    • Setting up debt management plans to consolidate payments
    • Bankruptcy advice and counseling
    • Referrals for housing assistance and other social services
  • Most reputable debt counseling services are offered by non-profit organizations accredited by the National Foundation for Credit Counseling (NFCC).
  • Services are confidential and provided by highly trained, certified professionals.
  • Initial consultations are often free. Fees for debt management plans average $25-50 per month.
  • Debt counseling services focus on unsecured debt like credit cards, medical bills and personal loans. They do not service mortgages or auto loans.

Considering Debt Counseling Services? What to Look For

When comparing potential debt counseling services, keep these factors in mind:

  • Non-profit status – For-profit companies may charge very high fees or fail to provide quality services. Stick to reputable non-profits.
  • Accreditation – Make sure the agency is accredited by the NFCC, demonstrating that they meet strict quality and ethical standards.
  • No upfront fees – Fees should only be charged if you choose to enroll in a debt management plan. Avoid any agency asking for upfront payment.
  • Experienced counselors – Ask about counselor qualifications, certification and average years of experience. More experienced counselors deliver better advice.
  • Customized advice – Counseling should be tailored to your unique goals and financial circumstances, not a one-size-fits-all approach.
  • Range of services – Look for budgeting help, creditor negotiation, debt management plans, student loan counseling, bankruptcy advice and referrals for additional resources.
  • Client reviews – Read online reviews to gauge customer satisfaction and hear real experiences with the agency.

How Debt Counseling Services Work

If you choose to work with a reputable debt counseling service, here is an overview of what you can expect:

Initial Consultation

Your first counseling session is a free one-on-one meeting with a certified credit counselor. In this confidential consultation, you will:

  • Review your full financial situation, including income, expenses, debts and goals
  • Identify areas for reducing spending and improving budgeting habits
  • Discuss options suited to your circumstances like debt management, creditor negotiation, debt consolidation or bankruptcy
  • Create a customized action plan for debt repayment and improved financial health

Debt Management Program

If appropriate, your counselor may recommend enrolling in a structured debt management program (DMP). Key features include:

  • One consolidated monthly payment to the counseling agency
  • Lower interest rates and waived late fees negotiated with creditors
  • Payments distributed to creditors on your behalf
  • Ongoing access to your counselor for support
  • Completion in 3 to 5 years typically

Ongoing Education & Support

Reputable agencies provide ongoing education and support such as:

  • Financial management workshops
  • Access to educational resources
  • Toll-free helplines for ongoing counseling
  • Progress tracking tools and personal dashboard
  • Counselor review and adjustment of your DMP as needed

This comprehensive approach helps ensure you develop lasting skills and habits for managing debt and finances wisely long after completing the program.

The Benefits of Debt Counseling Services

Debt counseling services offer many potential benefits for individuals struggling with debt:

  • Personalized expert guidance – Certified counselors tailor advice to your specific financial situation.
  • Lower interest and waived fees – Creditors may agree to reduce rates and waive certain fees through a DMP.
  • Consolidated payments – Make one monthly payment to the agency instead of many payments to creditors.
  • Improved credit – With responsible DMP participation, your credit can start improving in as little as 12 months.
  • Debt free in 3 to 5 years – The average enrollee pays off unsecured debt in less than 5 years.
  • No collateral required – Services are not a loan so no asset is required for collateral.
  • Access to additional resources – Counselors can refer you to housing aid, food banks and other services.
  • Ongoing support – Workshops, helplines and counselors provide ongoing education and motivation.
  • Bankruptcy alternative – Avoid the damages of bankruptcy and rebuild your credit responsibly.

Making the decision to seek help takes courage. With the assistance of a reputable debt counseling service, you can overcome debt and regain your financial footing for a brighter future.

Debt Counseling vs. Debt Consolidation

When weighing options for managing problem debt, two common choices are debt counseling services and debt consolidation loans. Key differences include:

Debt Counseling Debt Consolidation
Offered by non-profit credit counseling agencies Provided by for-profit lenders
Focuses on behavior changes through education Consolidates multiple debts into one new loan
Helps negotiate lower interest rates and waived fees May have high interest rates, fees
No collateral required Requires an asset to secure loan
Improves credit scores Hurts credit initially
3-5 year payoff timeline May extend repayment timeline
Ongoing creditor negotiation if needed No negotiation assistance
Customized services One product fits all

For many in significant, unmanageable debt, the education, support and interest rate reductions of debt counseling deliver the best outcome. But your certified counselor can advise if debt consolidation or another option makes sense in your unique situation.

Finding the Right Debt Counseling Agency for You

The best way to find a reputable agency offering high quality debt counseling services is to follow these steps:

  1. Check credentials – Verify nonprofit status and accreditation by the NFCC.
  2. Compare several agencies – Contact 3-5 recommended non-profits for consultations.
  3. Ask questions – Inquire about counselor qualifications, services offered and client experiences.
  4. Check reputation – Read online reviews and complaints with the Consumer Financial Protection Bureau.
  5. Compare services – Consider which agency offers the best fit for your needs and goals.
  6. Get started – Schedule an initial consultation with your top choice.

The right debt counseling service provides the education, support and action plan you need to manage debt wisely. Investing the time to find a reputable agency pays dividends through expert guidance that helps you regain financial freedom.

Frequently Asked Questions

What types of debt do debt counseling services handle?

Most agencies provide counseling for unsecured debt like credit cards, medical bills, payday loans and personal loans. They do not service secured debt like mortgages or auto loans.

Will creditors work with debt counseling agencies?

Yes, major creditors are willing to negotiate through reputable NFCC-accredited agencies. This provides interest savings and other benefits.

How much does debt counseling cost?

Initial consultations are often free. Debt management programs cost $25 to $50 per month on average. Fees should be clearly disclosed.

How long does debt counseling take?

With dedication to your customized plan, most resolve debt through counseling in 3 to 5 years. Bankruptcy and consolidation loans may take longer.

Can debt counseling hurt my credit?

No. Responsible participation actually helps improve credit. Missed payments would hurt scores but counselors work to avoid that.

Is debt counseling like bankruptcy?

No. Counseling helps avoid bankruptcy through education and DIY repayment plans. Bankruptcy damages credit while counseling helps improve it.

How do I start with a debt counseling service?

Contact a few NFCC-accredited non-profits in your area to compare services. Schedule an initial free consultation with your top choice.


Managing overwhelming debt is challenging but help is available. The comprehensive education, support and debt management plans offered by reputable debt counseling services provide a proven path to regain financial stability. If debt has become unmanageable, reach out today to take that first step toward relief.


GreenPath Financial Wellness. “How Credit Counseling Works.” Accessed September 27, 2023.

National Federation for Credit Counseling. “About NFCC.” Accessed September 27, 2023.

Federal Trade Commission. “Choosing a Credit Counselor.” Accessed September 27, 2023.

Consumer Financial Protection Bureau. “What are debt settlement, debt relief, and credit counseling services?” Accessed September 27, 2023.


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