More Americans are turning to nonprofit debt counseling than at any time in years: Money Management International (MMI) says debt under its management has topped $1 billion, the highest in 13 years, and September 2026 was its busiest enrollment month in over 15 years. Its clients arrive with an average of more than $40,000 in unsecured debt at card rates around 28%, and a debt management plan typically cuts that to just under 8%. On $40,000, that difference is the gap between a debt that never shrinks and one that is gone in five years — we ran the numbers below.
What the new numbers say
In an interview published on 26 October 2026, MMI's principal consumer finance analyst Ted Rossman shared the agency's latest data: more than 60,000 active debt management plans (the most since 2017), counseling volume up 9.5% year over year through September, average client debt up nearly 5% in a year, and Gen Z clients up 31% from 2025. 'It shows that there's a lot of financial strain out there,' he said.
The wider picture backs this up. The Federal Reserve's G.19 release (7 October 2026) puts revolving credit at $1,352.4 billion in August 2026, and the average interest rate on credit card accounts that are charged interest at 22.15% in the second quarter. MMI clients typically pay more than that — around 28% — because people in financial strain often carry higher-rate cards or penalty APRs.
What is a debt management plan, in plain English?
A debt management plan (DMP) is an arrangement set up by a nonprofit credit counseling agency. You make one monthly payment to the agency, which pays your card issuers. Card companies that agree to the plan usually lower your interest rate and may waive some fees. The plan typically runs four to five years, and the cards included are normally closed. It is not a loan and not debt settlement: you repay the full balance, just at a lower rate. The CFPB recommends checking that a counselor is with a reputable nonprofit and asking about all fees before you sign up.
The calculation: $40,000 at 28% vs. 8%
We took the average MMI client balance of $40,000 and compared paying it off over five years at a typical card rate of 28% versus a DMP-style rate of 8%. All figures are calculated by us and rounded.
| $40,000 of card debt | At 28% APR | At 8% APR (DMP-style) |
|---|---|---|
| Interest in the first month | $933 | $267 |
| Monthly payment to clear it in 60 months | $1,245 | $811 |
| Total interest over 60 months | $34,726 | $8,663 |
| Monthly payment to clear it in 48 months | $1,394 | $977 |
| Total interest over 48 months | $26,916 | $6,873 |
Our calculations, standard amortization, fixed rate, no new spending, fees not included. Illustrative only.
Here is the number that stops people in their tracks: at 28%, a payment of $811 a month does not even cover the $933 of interest charged in the first month. The balance would grow, not shrink. At 8%, the very same $811 clears the whole $40,000 in five years.
At 28%, $811 a month never pays off $40,000. At 8%, the same $811 clears it in 60 months.
If you are looking at a number like $811 a month, the plan only works if that payment has a protected place in your budget every single month.
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See what's inside →Smaller balances: does a plan still matter?
Rossman suggests a 0% balance-transfer card can work for roughly $5,000 to $6,000 of card debt, and a personal loan may help around $10,000, if your credit allows. Here is how the rate gap plays out on smaller balances over five years:
| Balance | Payment at 28% (60 months) | Interest at 28% | Payment at 8% (60 months) | Interest at 8% |
|---|---|---|---|---|
| $6,000 | $187 | $5,209 | $122 | $1,300 |
| $15,000 | $467 | $13,022 | $304 | $3,249 |
| $40,000 | $1,245 | $34,726 | $811 | $8,663 |
Our calculations. Illustrative only; your rate and terms will differ.
Is a debt management plan right for you? A quick check
| Your situation | Consider | Why |
|---|---|---|
| Several cards, high APRs, steady income | A nonprofit DMP | One payment, lower rate, fixed end date |
| Under ~$6,000, good credit | 0% balance transfer | Watch the transfer fee and the promo end date |
| ~$10,000, good credit | Personal loan | Fixed rate and term, if the rate is clearly lower |
| Income has dropped and you can't make minimums | Talk to a nonprofit counselor first | They can review all options, including hardship programs |
| Offers to 'settle for pennies on the dollar' for an upfront fee | Be very cautious | The FTC warns about debt relief companies that charge before settling any debt |
Five questions to ask before you enroll
- Is the agency a nonprofit, and are its counselors certified?
- What are the setup and monthly fees, in writing?
- Which of my creditors have agreed to the plan, and at what rate?
- Will my cards be closed, and what happens if I miss a payment?
- Can I see the full payment schedule and the expected end date?
Already struggling to pay this month? Our 9 scripts for lenders, utilities and hospitals can help you start the conversation. And if the holidays are coming fast, read how to build a holiday debt firewall. If debt is weighing on your mind, you are not alone — talking to someone you trust or a counselor helps.
Frequently asked questions
Does a debt management plan hurt your credit?
Enrolling is not the same as settling or bankruptcy, and you repay what you owe. Closing card accounts can affect your credit utilization and history, and some lenders may note the plan. Making every payment on time over the plan is usually what matters most.
How much does a debt management plan cost?
Nonprofit agencies usually charge a setup fee and a monthly fee, and the amounts vary by agency and state. Always get the fees in writing before you sign, and ask whether they can be reduced if you can't afford them.
How long does a debt management plan take?
Typically four to five years, according to MMI. At an 8% rate, $40,000 can be repaid in 60 months for about $811 a month in our calculation.
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Educational content only. Not personalised financial advice.