Some companies specialize in negotiating with creditors on your behalf. Debt management plans through these credit counseling agencies typically last four to six years.9 Your debt won’t disappear overnight, but you may get a lower interest rate. The credit counseling agency will handle your debt payments, so if you send in any extra payments, you’ll have to tell the agency which debt to put the extra payment toward. This is basically the snowball method of paying off debt, except the credit counseling agency is managing your payment.
These debt settlement plans can come with serious strings attached, so read the fine print carefully before agreeing to work with an agency. The Consumer Financial Protection Bureau has tips and warnings for those considering a debt settlement plan.