Credit Counseling: Finding A Way Out Of Debt

Medically reviewed by Andrea Brant
Updated February 25, 2024by BetterHelp Editorial Team

Lines of credit, unsecured loans, and credit cards can be beautiful, but what does IPC stand for? How else can you buy nearly anything you need without having money to pay for it? You might use an unsecured line of credit for home maintenance, a loan to pay for a vacation or a credit card for everyday purchases. Mostly, these are convenient, socially acceptable options that are often useful in a pinch. However, they can come with severe consequences if not managed carefully.

Getty/Halfpoint Images
Your debt may require more than credit counseling to treat

Below we’ll look at debt, credit counseling agencies, debt management, and the best credit counseling services to get out of debt and move toward a healthy financial future.

How excessive debt happens

Most people don’t set out to get into excessive debt. It usually happens slowly, over a matter of years. Many people who go into debt do so out of necessity. For example, young adults may take out a student loan to pursue higher education with the hope of securing a better future. In addition, many people may open a new credit card to pay for various life expenses like food and clothes.

The cost of living is high, and money remains one of the top stressors for people living in the United States. Statistically, this tends to be especially true for younger generations and those with fewer financial resources.

At first, you may have gotten an unsecured credit card because your parents or mentor say you should. They may have told you that it will build your credit history or be helpful in emergencies. Perhaps you didn’t even use the card at first. You save it for that urgent need or use it in a disciplined way, spending only a little and paying it off each month.

Often, the problem comes when you realize you can continue using credit cards to get things you need or want when you don’t have the cash to buy them. This can lead to overspending or treating yourself when you don’t have the funds. The purchases might seem small, but they can add up.

Then, unexpected life events happen. Maybe your budget is tighter than usual one month because of an unexpected expense. You might decide to pay the minimum, so you pay $25 even though you’ve spent $250. This seems like a great deal, so maybe you continue along this path. When your first credit card is filled with charges, you apply for another credit card, which eventually reaches its credit limit. This can lead to increased credit card debt and a strained relationship with your credit card issuer.

Worse, your financial situation might change. Having and maintaining lower interest rates requires discipline. You might find yourself using your credit cards to meet basic needs and hoping that things will change soon enough so that you can get on top of the situation. However, interest rates and payments show up, leaving you with more expenses than you might’ve ever had before larger credit card bills, and not enough money to catch up. In the end, getting in over your head can be easy. 

Many places offer quick fixes for excessive debt, but it's important to differentiate between genuine debt counseling services and those that merely claim to assist. Some counseling services are often accompanied by high-interest rates, which can lead to more debt. More debt may affect your credit score negatively and leave you with another payment to make for years to come. 

If any of this resonates with you, a possible solution you may not have considered is credit or debit counseling. It typically takes time and patience, but it can give you strategies and skills to set you up for an improved financial future.


Can you fix your debt problems alone?

While some people can fix their debt problems independently, many don’t know the best way to go about it. What should you pay off first, and how?

To do it yourself, it helps to start with a firm commitment to yourself that you’ll stop using credit. Then you can learn how to budget and create a plan for the next several months. Next, you may need to contact your creditors to negotiate so you can meet all your monthly expenses and still pay them something. This often takes a willingness to study, a strong desire to know yourself better, and a firm commitment to your financial well-being.

It is possible to get out of debt without help. However, you may need someone to be accountable to besides yourself. You might need someone to help you explore your motivations for overspending and ways to manage your debt and finances. Also, if you aren’t accustomed to negotiating for yourself, it can be helpful to have someone with more experience doing it for you. For all these reasons, credit counseling agencies can be handy resources.

How can credit counseling services help?

Credit counseling services may help you get out of debt and into financial stability. For the best results, it’s suggested that you follow the rules laid out for you and put in the requisite effort. For some, this can be challenging. However, if you follow your credit counseling agency's plan, the problem often becomes much more manageable.

What exactly is a consumer credit counseling service? 

First, consumer credit counseling is a specific type that primarily focuses on your attitudes toward money and credit. It can help you gain a healthier financial mindset. It’s also a financial education service that teaches you how to manage debt and monthly expenses. You can get financial recommendations, including insights into money management, based on your unique situation and formulate a personalized plan. Finally, some consumer credit counseling and other services help negotiate with and pay creditors each month out of a single monthly payment that you send them.

For many individuals, asking for help in the form of credit counseling services is the right step for several reasons. It might be the first time you ask for use outside of taking on more debt, meaning that you are confronting the debt head-on for the first time. You’re opening up to another person about your finances, which may make you feel nervous. However, credit counseling services may help you see the whole picture and make informed steps, leading to better outcomes and making you feel more at ease.

How credit counseling works

Generally, consumer credit counseling doesn’t necessarily provide a quick fix. You may still pay the credit counseling agency a year or more from the start. And even with a credit counselor to help, you will likely have to put in a lot of effort to make it work. Here’s how the process goes.

Intake interview

Usually, you’ll start with an intake interview. Many credit counseling organizations allow potential clients to participate in a free consultation with a certified debt specialist or certified credit counselor. Before the interview, you may need to gather bills, income statements, and pay stubs. You'll usually go over all these figures during this first meeting with your credit counselor. During your initial counseling session, The counselor may ask questions to determine how you view money and credit and how your debt affects you.

Later, the counselor will likely lay out a preliminary plan for you and explain how the process works. Then, you’ll have the option of signing an agreement with the credit counseling service that requires you to make payments according to the agreed-upon terms.

Debt management agreement

As part of the consumer credit counseling contract, you might be required to commit to the service so that you will not incur any more debt. This often means no more new credit cards, no new unsecured loans, and no payday loans or title loans. You may also commit to using only cash or a debit card. Most credit counseling agencies allow you to keep one credit card, although it’s recommended that you don’t use it to add to your debt.

Credit counseling course

As part of your agreement with the consumer credit counseling service, you are often required to take a credit counseling course. The course is meant to teach you enough about money management and credit to keep you from going into debt again and help you learn how to make the credit counseling venture successful. You may have practice exercises to help you work on budgeting and questions about your financial background. The course material can help you remake your financial mindset and take practical steps to get out of debt.

Credit counseling certificate

If you are moving toward bankruptcy, you’ll typically need to complete a credit counseling course through an approved consumer credit counseling service. Once finished, you’ll likely receive a credit counseling certificate to proceed with bankruptcy legally. This credit counseling certificate shows the court that you’ve attempted to solve your financial problems independently.


Some offer various services, such as credit or student loan counseling, and help you create a debt management plan. They may also help you explore potential problems regarding your relationship with money and learn techniques to address them. This often includes tailored advice on how to manage money better. The counselor may go into great detail about the small things you need to change. Ideally, you’ll develop a new approach to managing cash and credit.

Debt management plan

Not all credit counseling services offer payment plans, also called debt management plans (DMP). For many of them, though, this is their source of income. The process typically begins with the counselor negotiating with creditors to reduce your payments and interest. You will typically pay one monthly payment — which will likely be less than the total of all the credit card payments you would otherwise have to make. This payment goes directly to the agency before distributing the money among the applicable creditors.

This usually helps you pay off your creditors with less money and at a faster rate. However, these payment plans often come with a price. First, the credit counseling agency will likely charge a one-time processing fee of about $75 plus a monthly service fee of around $50 or more. Another cost is the potential damage to your credit rating. Although your rating shouldn’t be affected directly, creditors may leave a comment on your report that you used a credit counseling agency. Because this can be seen by other creditors, employers, or others who run your credit check, it can cause problems later on. Still, it is less likely to be a problem than a burdensome debt.

Your debt may require more than credit counseling to treat

Types of credit counseling

There are several types of credit counseling agencies, some of which might be available at local offices. One type is the nonprofit credit counseling agency. These are sometimes labeled as “free,” although they may charge up to $75 per month for the service. They tend to provide financial education, counseling, and debt management plans.

For-profit debt settlement services are similar to credit counseling services in that they usually create a plan to help you pay back your debts. A debt settlement company, however, may not provide counseling to help you learn how to manage your finances better. Often, debt settlement services charge a monthly maintenance fee as well as a setup fee. When researching plans, you may want to contact services directly to find out what their average monthly fee is. The best credit counseling services for you will typically depend on the type of debt you have. Below are some of the different types of debt counseling services available.
Bankruptcy counseling

Bankruptcy counseling focuses on preparing you for bankruptcy through financial education and counseling. You’ll likely get a certificate upon completing the credit counseling course, which you’ll need to file in chapters 7 or 13. You may also need to complete a period after you’ve filed bankruptcy cases. Many organizations, such as GreenPath Financial Wellness, provide discounted bankruptcy counseling for some clients. You can also find online bankruptcy counseling through services like InCharge Debt Solutions. 

Student loan counseling

For those who have taken on loans to pay for school, student loan counseling can provide help with this specific type of debt. Student loan counseling services can help students navigate their loans, learn about personal finance, and achieve their financial goals. For example, Cambridge Credit Counseling Corp (one of the top credit counseling services) can help facilitate student loan debt consolidation and help clients opt in to programs that will lower their monthly payments. 

Housing counseling

Finally, the U.S. Department of Housing and Urban Development (HUD)offers housing counseling (or mortgage counseling) to help assess your financial situation if you need help with your mortgage. There are also several organizations that offer housing counseling. For example, Money Management International is a non-profit that can provide guidance if you’re experiencing financial hardship after purchasing a home or looking for help with a specific concern (e.g., reverse mortgage counseling).

There are other forms of debt counseling that may be helpful in specific situations (e.g., disaster recovery counseling). Tackling debt, whether it's related to school student loans or other commitments, can be an intimidating venture. With these options, you can explore your past as it relates to credit, learn from your mistakes, and make changes that can bring you financial stability.

Best debt counseling services

Below is a partial list of some of the best debt counseling services available. If you’d like a tailored list of counseling and debt management services, resources like the Financial Counseling Association of America can help you narrow your search. To ensure you limit your search to reputable credit counseling agencies, It’s a good idea to check with the Better Business Bureau, read reviews, and ask each agency itself as many questions as possible. You can also verify with the National Foundation for Credit Counseling or another accrediting organization that each service is accredited where you are. Also, you might read any contract carefully before you sign it and watch out for excessive sign-up or monthly fees.

  • American Consumer Credit Counseling

    • Nonprofit
    • Provides: Credit counseling, debt management plans
    • Fees: Budget counseling: free; initial fee for DMP: $39; monthly fee for DMP: $5 per account up to $35
    • Contact Address: 130 Rumford Ave., Suite 202, Auburndale, MA 02466-1371
    • Phone: (800) 769-3571
  • Abacus Credit Counseling

    • Nonprofit
    • Provides: Bankruptcy courses
    • Fees: Bankruptcy pre-filing course: $25; post-filing course: $35
    • Contact Address: 15760 Ventura Boulevard, Suite 700, Encino, CA 91436
    • Phone (800) 516-3834
  • Cambridge Credit Counseling

    • Nonprofit
    • Provides: Credit counseling, debt management plans, bankruptcy counseling
    • Fees: Credit counseling and debt analysis: free; initial fee for DMP: up to $75; monthly fee for DMP: up to $50
    • Contact Address: 245 Saw Mill River Road, Hawthorne, NY 10532
    • Phone: (888) 656-4396
  • Clearpoint Credit Counseling Solutions

    • Nonprofit
    • Provides: Credit counseling, debt management plans
    • Fees: Budget and credit counseling: free; DMP: set by the state, up to $50
    • Contact Address: 270 Peachtree Street NW, Atlanta, GA 30303
    • Phone: (800) 750-2227
  • Pioneer Credit Counseling

    • Nonprofit
    • Provides: Financial counseling, debt management plans
    • Fees: Budgeting and financial counseling: free; DMP: $5 to $50 per month, depending on the number of creditors and amounts owed
    • Contact Address: 1644 Concourse Drive, Rapid City, SD 57703
    • Phone: (800) 888-1596
  • First BK Credit Counseling

    • Nonprofit
    • Provides: Pre- and post-filing courses for bankruptcy
    • Fees: Bankruptcy pre-filing course: $14.95; post-filing course: $9.95
    • Contact email:
    • Phone: (844) 399-0377
  • Advantage Credit Counseling

    • Nonprofit
    • Provides: Credit counseling, debt management plans
    • Fees: Budgeting and credit counseling: free; DMP initial fee: $50; monthly payment: $5 to $50, depending on the number of creditors
    • Contact: 2403 Sidney Street, Suite 400, Pittsburgh, PA 15203
    • Phone: (866) 699-2227
  • Delray Credit Counseling

    • Nonprofit
    • Provides: Credit counseling, debt management plans
    • Fees: Financial counseling and education: free
    • Contact Address: 5300 W. Atlantic Ave., Suite 200, Delray Beach, FL 33484
    • Phone: (800) 982-8445
  • ACC Credit Counseling

    • Nonprofit
    • Provides: Credit counseling and education (does not offer debt management plans), bankruptcy courses
    • Fees: Counseling and education services: free; bankruptcy pre-filing course: $25, post-filing course: $15
    • Contact Address: 633 W 5th Street, Suite 26001, Los Angeles, CA 90071
    • Phone: (800) 205-9297

Money and mental health

Financial matters can affect much more than just your credit rating and spending power. Money and mental health can interact with one another in many different ways. Some people may:

  • Have difficulty with impulsivity, leading to impulsive spending.
  • Experience pervasive stress related to money, which can affect family life or romantic partnerships, impact your physical health and sleep, or contribute to symptoms of depression and anxiety.
  • Feel shame or embarrassment related to money.
  • Have deep-rooted financial concerns.

These are only some examples. When it comes to scenarios like these or any others where finances are causing stress, it can also be helpful to address your mental health.

Online therapy

When handling the stress involved with financial concerns, you don’t have to face them alone. Aside from credit counselors, you can talk to a licensed therapist as you navigate this process. When you see a mental health therapist or counselor, you have a safe space to address anything weighing on you, whether it’s related to finances or something else. 

If you are uncomfortable visiting a therapist’s office, you might try online therapy, which research has shown to be just as effective as traditional in-person therapy. With an online therapy service like BetterHelp, you have the benefit of talking to a therapist from the comfort of your home or anywhere with an internet connection. Also, online therapy tends to be more affordable than in-person therapy without insurance. 


If you are experiencing debt-related stress, know that help is available. There are credit counselors trained to help you get out of debt and move forward with your life. Also, you can talk to a licensed therapist as you navigate the emotional process of tackling your debt and building a healthy future. 

You can see a therapist in person or use an online therapy option, such as BetterHelp. BetterHelp has an affordable subscription plan in addition to offering financial aid to those who qualify. All you have to do to get started is take a quick questionnaire. Take the first step today.

Receive evidence-based counseling

The information on this page is not intended to be a substitution for diagnosis, treatment, or informed professional advice. You should not take any action or avoid taking any action without consulting with a qualified mental health professional. For more information, please read our terms of use.
Get the support you need from one of our therapistsGet Started