Debt management is the process in which you manage the repayments of debt. You can create your own debt management plan or have a credit counseling organization to assist you with a plan.\r\n\r\nIf your financial problems stem from too much debt or your inability to repay your debts, a credit counseling agency may recommend that you enroll in a debt management plan (DMP). A DMP alone is not credit counseling, and DMPs are not for everyone. Don\u2019t sign up for one of these plans unless and until a certified credit counselor has spent time thoroughly reviewing your financial situation, and has offered you customized advice on managing your money. Even if a DMP is appropriate for you, a reputable credit counseling organization still can help you create a budget and teach you money management skills.\r\n\r\nIn a DMP:\r\n\r\n \tYou deposit money each month with the credit counseling organization. It uses your deposits to pay your unsecured debts, like your credit card bills, student loans, and medical bills, according to a payment schedule the counselor develops with you and your creditors.\r\n \tYour creditors may agree to lower your interest rates or waive certain fees. But it\u2019s a good idea to check with all your creditors to be sure they offer the concessions that a credit counseling organization describes to you.\r\n \tA successful DMP requires you to make regular, timely payments; it could take 48 months or more to complete your DMP. Ask the credit counselor to estimate how long it will take for you to complete the plan.\r\n \tYou may have to agree not to apply for \u2014 or use \u2014 any additional credit while you\u2019re participating in the plan.\r\n\r\nIf you have too much debt, going under a debt management plan may be the best option especially if you\u2019re unable to meet the monthly payment obligation. Your payments may be reduced along with the removal of fees and lowering of interest rates. The creditors may record the fact you\u2019re under a debt management plan which will impact your credit score.\r\n\r\nThere are a few things to avoid when signing up with debt management plan companies (or also known as debt settlement companies). Some organizations will call themselves non-profit as well so do your homework.