Ask Jack About Debt

Debt Management


What are "Consumer Credit Counseling Services" (CCCS)?

These are member agencies of the National Foundation for Credit Counseling (NFCC), Inc., founded in 1951 to provide services to consumers throughout the United States. They claim to "set the national standard for quality credit counseling, debt reduction services and education for financial wellness." In my experience they are effective, efficient and honest.

Who Is NFCC?

The NFCC is a network of non-profit credit counseling agencies, often known as Consumer Credit Counseling Service (CCCS). There are 150 member agencies, with 1,300 offices throughout the country. NFCC members can be identified by the NFCC member seal. This seal signifies agency accreditation, counselor certification and policies that ensure free or low-cost services.


Debt management: How CCCS helps you take care of your debt

Debt Reduction

CCCS offers useful Debt Management Plans. These plans can be used to get your debt under control, but they are also useful for debt reduction. Don't expect miracles, but CCCS can usually get the outstanding debt reduced (often by removing some or all of accumulated interest and late fees), and then they can often freeze the debt, preventing future interest and late payments.

This is effectively debt reduction. Especially when you do it with all of your creditors.

Debt Consolidation

Once the reductions are negotiated, CCCS consolidates your debt, giving you a fixed amount to be paid off over some period of time. You send them a single monthly payment and they distribute it to all of your creditors.

Eventually your old debt is all paid off.

But this does not work in all cases. If you cannot make reasonable monthly payments, there is no way CCCS can create an effective plan. I talked to a woman who has $16,000 in debt on three credit cards and said she could afford only $5 per month per card. That would never work. Bankruptcy was her only option.

But if you have enough income and you debt is within reach, CCCS gives you a practical, individualized plan to reduce it and pay it off. This will help you reduce your stress about your finances, and still pay off your debt.

Here is how they describe their debt management service:

"Debt Management Plan (DMP). A DMP is a systematic way to pay down your outstanding debt through monthly deposits to the agency, which will then distribute these funds to your creditors. It takes approximately 36-60 months to repay debts through a DMP....Our DMP serves the dual role of helping you repay your debts while creditors receive the money owed to them."

How to find a CCCS office near you:

NFCC is located in Silver Spring, Maryland. NFCC member offices can be reached in communities nation-wide:

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