A non-profit debt consolidation program (also known as a debt management plan, debt management program, credit counseling program, non-profit credit counseling program) is a creditor sponsored program that has been advertised as helping individuals who are falling behind or having “trouble” paying their minimum payments each month.

To qualify for this program, typically the individual with the debts has to make at least a 2% minimum payment each month plus a fee to the credit counseling agency. In certain cases, credit counseling agencies may charge a monthly fee as high as $79 a month for their services.

They then make one payment to the creditors each month. In the past, creditors would lower the interest rates a lot (even to 0%), but in recent years, the creditors do not lower the interest rates as much, some do not lower them at all, and some do not even work with non-profit debt consolidation plans. Also, on this program, if one payment is missed or late, the creditors may kick the individual out of the program.

The credit report still shows that a third party (the debt consolidation credit counseling agency) as paying the accounts. While interpretation is different from one lender to another, some lenders equate the credit rating on this program to a chapter 13 bankruptcy.