What Debts Can Be Included in a Debt Management Plan? 

Debt management programs are designed to handle unsecured debts, balances not tied to collateral such as a house or car. That usually means credit cards, medical bills, certain personal loans, and collection accounts. Secured debts, student loans, and government obligations generally require different repayment solutions.

For more than 30 years, Consolidated Credit’s certified counselors have helped people understand these distinctions. Many clients are surprised to learn that some debts they expected to include are excluded, while others they thought didn’t qualify can often be added.

This guide explains which debts typically work within a debt management plan, which do not, and how creditor participation affects the overall success of the program.

Debts typically included in a debt management program

Credit card debt: the primary focus

Credit cards make up the majority of debts included in a debt management program. Major issuers like American Express, Citi, and Discover have established relationships with nonprofit credit counseling agencies. Consolidated Credit works with more than 1,600 creditors, giving clients access to established concessions that make repayment more manageable.

Through a DMP, creditors may agree to reduce interest rates – often bringing high double-digit APRs into the single digits – and waive fees such as late or over-limit charges. These changes lower monthly payments and allow more of each payment to reduce your balance.

Retail and store (private-label) credit cards often carry significantly higher APRs with some reports showing purchase APRs exceeding 30% Consumer Financial Protection Bureau. For many consumers, the interest savings achieved through a DMP can be especially meaningful.

Gas cards generally fall into this same category and can be included in a DMP.

Business credit cards may also qualify if the account carries personal liability. For example, when the card is in your name. Cards used solely for business operations, however, usually don’t qualify for a personal DMP.

Credit cards are well-suited for DMPs because they are unsecured debts. Creditors typically prefer structured repayment over the risk of nonpayment or bankruptcy.

Unsecured personal loans: flexible inclusion options

Personal loans without collateral often fit naturally into a debt management program, but the benefits depend on the loan terms and the lender’s willingness to cooperate.

Bank-issued personal loans may qualify if interest rates are high or if the borrower is falling behind on payments. Many banks prefer the predictability of structured repayment through a DMP over the risk of default or charge-off.

Credit union loans are also commonly included. Because credit unions are member-focused, they may provide more flexible concessions and better rate reductions than traditional banks, especially if the borrower has other accounts or services with the credit union.

Online personal loans can be more variable. Some fintech lenders participate in DMPs, while others maintain stricter repayment policies. When these loans carry high interest rates, however, they are usually worth attempting to include.

Peer-to-peer loans may also be added, though creditors sometimes require additional documentation about the borrower’s financial situation. In these cases, repayment arrangements may need to be negotiated with platform administrators or individual investors.

Unsecured personal loans work well in DMPs when creditors agree to participate, but results can vary widely depending on the lender.

Medical bills: a cooperative debt category

Medical debt is often among the easiest types of debt to include in a debt management program. Because these expenses are usually unexpected and not tied to collateral, healthcare providers are generally open to structured repayment.

Hospitals and emergency care providers frequently work with DMPs, since they would rather receive steady monthly payments than rely on collection agencies.

Doctors and specialists may also cooperate, particularly when patients show a commitment to repayment through a nonprofit credit counseling agency. The stability of a DMP often appeals to smaller practices that don’t have the resources to pursue collections on their own.

Dental and vision care expenses can usually be included, especially for large procedures or ongoing treatment plans. In many cases, collections activity is paused once a DMP is in place and payments begin.

Medical equipment financing and prescription balances may also qualify, provided they are one-time debts rather than ongoing monthly costs. Durable equipment purchases and high prescription expenses are often treated like other unsecured debts in a DMP.

Overall, medical debts are well-suited for DMPs because providers recognize the burden these costs place on patients and generally prefer guaranteed repayment to the uncertainty of default.

Collection accounts: bringing old debts into a DMP

Collection accounts for previously unsecured debts are often eligible for inclusion in a debt management program. When these debts are added, credit counseling agencies can work with collectors to set up structured payments, which may reduce collection activity and make repayment more manageable.

Credit card accounts that have been sold to third-party collectors are frequently included in DMPs. Agencies often accept steady monthly payments through a plan rather than risk recovering nothing if the debt goes unpaid.

Medical debts in collections are also common candidates. Because these balances often arise unexpectedly, medical collection agencies are usually open to structured repayment arrangements through a nonprofit counselor.

Utility and service bills that have gone to collections – such as old electric, water, cable, or internet accounts – can typically be added to a DMP.

Retail and service debts that are past due and assigned to collectors may also qualify. These balances are often easier to resolve through negotiated payment terms once they are part of a structured plan.

The main advantage of including collection accounts in a DMP is that collectors generally stop pursuing the debt once payments are established. While activity may not end immediately in every case, consistent payments through a DMP can significantly reduce collection calls and letters over time.

Payday loans and cash advances: challenging but possible

Payday loans and other short-term, high-cost lending products can sometimes be included in a debt management program, though cooperation from these creditors is less consistent than with traditional lenders.

Payday lenders vary in their willingness to work with nonprofit credit counseling agencies. Some have established arrangements for DMP participants, while others insist on direct repayment outside the program.

Cash advance companies and check-cashing services may agree to participate, especially if balances are large or the borrower demonstrates financial hardship.

Online payday lenders often present mixed results. Certain platforms will negotiate repayment terms through a DMP, while others maintain strict collection policies.

Title loans are more complicated. If part of the balance is unsecured, it may qualify for inclusion. However, because the loan is backed by a vehicle title, the secured portion usually requires separate handling to avoid repossession.

Including payday or cash advance debts in a DMP can be difficult, but when creditors do cooperate, the savings may be significant given the high fees and triple-digit annual percentage rates (APRs) these products often carry, the Consumer Financial Protection Bureau reports.

Debts generally not included: secured and priority obligations

Secured debts: collateral changes everything 

Debt management programs are designed for unsecured credit, which means debts backed by collateral are generally excluded. When repayment is tied to an asset the lender can claim, creditors have little incentive to negotiate through a DMP.

Take mortgages, for example. Because a home secures the loan, the real risk is foreclosure, and that is addressed through a lender’s own loss-mitigation tools – loan modifications, forbearance, or refinancing – rather than a third-party repayment plan.

Auto financing works in a similar way. A missed car payment carries the possibility of repossession, so lenders prefer to restructure terms directly with the borrower rather than route payments through a counseling agency.

Even smaller loans that are backed by savings accounts or certificates of deposit fall outside of DMPs. In those cases, the lender can simply draw on the pledged funds to cover missed payments. Home equity loans and lines of credit present another challenge, since they are secured by real estate and expose borrowers to foreclosure risks that demand legal and financial strategies beyond a standard repayment plan.

In short, collateral changes the equation. Because secured creditors can recover what they are owed through the asset itself, they rarely offer the concessions – lower interest rates, waived fees, or flexible terms – that make a debt management program effective.

Student loans: limited eligibility with important caveats

Federal student loans don’t qualify for debt management programs. Consolidated Credit notes that student loans aren’t included in a DMP, and federal borrowers should instead use Education Department options like income-driven repayment, deferment/forbearance, or forgiveness where eligible. Check Studentaid.gov for the latest on IDR availability and court-related updates.

Private student loans are different. Many lenders do not participate in DMPs, but policies vary. Any potential inclusion is case-by-case and uncommon, so a certified credit counselor should review your loans and the lender’s rules before you decide.

Avoid refinancing federal loans to “make them eligible.” Converting a federal loan into a private loan permanently waives federal protections (like PSLF and IDR-based forgiveness). Do not refinance solely to fit a DMP without fully weighing those trade-offs with a counselor.

Tax debts and government obligations

Tax and government balances aren’t handled through a debt management program. They’re resolved through agency-specific remedies that provide protections and outcomes a DMP can’t offer.

IRS debts are addressed through the Service’s own tools—installment agreements, Offers in Compromise, and “currently not collectible” status, with possible penalty relief in some cases. These options come with rules, forms, and enforcement powers (liens, levies) that sit outside credit counseling and require tax-procedure expertise.

State tax liabilities follow a similar pattern. Revenue departments run their own payment plans and hardship programs, and they control enforcement, so negotiations happen directly with the agency rather than through a DMP.

Property taxes are handled locally. Counties and municipalities use distinct collection timelines and can place liens or begin tax sale processes, so resolution must go through the local tax authority.

Bottom line: government debts remain separate from a DMP because purpose-built programs already exist for them. A certified credit counselor can help you triage priorities and budget for payments, but tax resolution itself should be worked out with the IRS or state/local tax office (and, when needed, a qualified tax professional).

Legal and court-ordered debts

Court-mandated obligations sit outside a debt management program because a DMP can’t change a judge’s order or override statutory requirements.

Child support and alimony must be paid as ordered; any change has to go through the family court, and these obligations generally take priority over other bills.

Court fines and restitution are similar: they stem from criminal or civil judgments and must be resolved with the court or through an attorney, not a credit counseling plan.

Standard legal fees owed to a law firm for services may be treated like other unsecured bills and, in some cases, can be included. However, fees that are court-ordered or tied to a judgment typically require separate legal handling.

If you’re juggling these alongside other debts, a certified credit counselor can help you build a budget around the required payments. But any modification or relief must be pursued through the appropriate court or with qualified legal counsel.

Essential living expenses: ongoing obligations

A debt management program targets past-due, unsecured debts, not your day-to-day bills.

Ongoing costs like rent or mortgage payments, utilities, insurance premiums, phone and internet service, transportation, and childcare must continue to be paid directly each month.

If any of these bills have aged into a distinct past-due balance (for example, a utility arrearage that’s been sent to collections), that delinquent amount may be reviewed for inclusion; the current monthly charges still remain outside the DMP and belong in your household budget.

A certified credit counselor will account for these essentials first – housing, utilities, food, transportation, insurance – so your DMP payment is affordable without jeopardizing core obligations.

The goal is to keep current on today’s bills while the program tackles yesterday’s debt.

Critical considerations and limitations

Creditor participation is voluntary. A debt management program isn’t court-ordered like bankruptcy, so each creditor decides whether to cooperate and what concessions to offer. Participation and terms vary by industry and by lender.

Results depend on your profile. Lenders weigh factors such as recent payment history, account age, balance and APR, prior hardship communications, and overall budget. When a DMP offers a better recovery path than collections or charge-off, creditors are more likely to reduce rates and waive certain fees.

Plan for exceptions. It’s common for one or more creditors to decline or to offer less favorable terms than others. A certified credit counselor will map out contingencies – continuing to pay a holdout creditor directly, seeking a hardship plan, or considering alternatives like settlement or legal advice – so your overall strategy still works if a creditor doesn’t join the DMP.

Expectation setting matters. Because terms are not guaranteed, counsel clients to judge success by affordability and steady balance reduction across the full portfolio, not by any single creditor’s concession.

Account closure implications

Most creditors require closing or suspending credit card accounts that enter a debt management program. This prevents new charges and helps the plan succeed, but it also changes how your credit profile behaves while you repay.

When accounts close, available credit drops. That can raise your utilization ratio (balances ÷ limits) and may cause a short-term score dip. Over time, as balances fall and on-time payments are recorded through the DMP, scores often stabilize and can improve. Closed accounts typically remain on your file and keep their age, so you don’t lose the benefit of their history; you’re simply unable to add new charges.

Because you won’t have revolving credit to fall back on, build an emergency fund and move any recurring bills off the closed cards (switch subscriptions and autopays to a checking account or debit card) to avoid declined payments and fees.

Avoid opening new credit while you’re in the program. New accounts or fresh charging can void creditor concessions and jeopardize your DMP. After you complete the plan, a counselor can map out a responsible rebuild (for example, a secured card or credit-builder loan) if your situation calls for it.

Complete debt inclusion strategy

Debt management programs work best when all eligible unsecured debts are enrolled together. A complete portfolio gives you one consolidated payment, consistent concessions, and a clear payoff path.

Leaving accounts out creates friction: you’ll still field collection activity on excluded balances, juggle multiple due dates, and risk budget strain that can derail the plan. By contrast, enrolling everything eligible lets your counselor allocate payments strategically across creditors based on rates, balances, and each lender’s concessions, so more of your money goes to reducing principal every month.

Comprehensive inclusion also signals equal treatment to creditors. When everyone sees the same disciplined approach, participation and negotiation outcomes often improve compared with a selective, piecemeal plan.

There are occasional reasons to hold an account back (for example, an active dispute or a balance that’s about to be paid off this cycle), but those are the exception. In most cases, enrolling all qualifying unsecured debts produces the most affordable payment and the fastest, most reliable path to completion.

Special circumstances and exceptions

Business debts with personal guarantees

Some business obligations can be considered for a debt management program if you are personally liable. That typically means a personal guarantee or an account opened in your name.

Personally guaranteed business loans may be eligible when they meet the usual DMP criteria (unsecured, in repayment, and the creditor agrees). Because these balances may intersect with tax reporting and ongoing business needs (cash flow, vendor credit), a counselor will weigh inclusion against operational consequences.

Business credit cards used for personal expenses can often be enrolled if the liability is personal. Expect to document how the account has been used to classify it correctly. Cards used exclusively for legitimate business operations are usually not appropriate for a personal DMP.

For partnerships and LLCs, liability depends on the governing documents and the specific guarantee language. Determining whether a partner or member is personally responsible – and therefore whether a DMP is even an option – requires a case-by-case review of the contract terms.

Co-signed and joint debts

Debts with more than one responsible party need extra care because decisions affect everyone on the account.

Co-signed accounts. A DMP doesn’t remove a co-signer’s liability. Late payments before enrollment, and any missed payments during the plan, can appear on both credit files. Before adding a co-signed debt, coordinate with the co-signer so they understand that the account will typically be closed to new charges, concessions are at the creditor’s discretion, and any payment disruption could impact their credit. Some creditors may also require the co-signer’s acknowledgment or documentation before they’ll cooperate.

Joint accounts. For jointly held credit (e.g., spouses/partners), both parties are usually expected to be on the same page. Closing the account, adjusting autopays, and updating household budgeting should be done together. If one party won’t participate, a counselor can outline alternatives (paying that creditor directly outside the DMP, splitting obligations, or considering separate hardship arrangements) so the overall plan remains workable.

Protecting relationships and credit. Set clear expectations about payment timing, account closure, and communication with creditors. Get a single point of contact (you or your co-obligor) for creditor calls, and confirm where statements will be sent. The goal is to prevent surprises while the DMP delivers steady, on-time payments that help both parties over the long term.

Debts in legal proceedings

When a balance is already in litigation, a debt management program won’t pause the court process or undo what a judge has ordered. That means timing and coordination matter.

Before judgment. If a creditor hasn’t won a judgment yet, enrolling the account in a DMP may still be possible and can sometimes lead to more workable terms. Cooperation depends on the creditor and the stage of the case; some will continue the suit until they see consistent payments.

After judgment. A DMP can help you budget for court-ordered payments, but it doesn’t reverse the judgment or stop enforcement tools like garnishment, levies, or liens once they’re in motion. Any change to those orders must go through the court or opposing counsel.

If settlement is on the table. You can pair a negotiated settlement with a DMP for other debts, but the strategy should be sequenced carefully so one plan doesn’t undermine the other. Coordinate with your attorney and your credit counselor on amounts, timing, and documentation.

Bottom line: a DMP can organize repayment, but it’s not a legal remedy. For active lawsuits or judgments, consult a licensed attorney while your counselor structures the rest of your debts around the legal requirements.

How we determine your debt eligibility

A certified credit counselor reviews your full financial picture to decide what belongs in a debt management program and what should be handled another way.

The process starts with a detailed budget: housing, utilities, food, transportation, insurance, and other essentials are set aside first to make sure any plan is sustainable. We then inventory each account (type of debt, balance, APR, status, delinquency, and whether it’s secured or unsecured) and confirm which items are even eligible for inclusion.

Next, we look at creditor policies. Different lenders offer different concessions, so your counselor reviews known participation practices and models what your monthly DMP payment would be under likely rate reductions and fee waivers. If an account is unlikely to cooperate – or is legally or contractually ineligible – we outline alternatives (for example, a creditor hardship plan, settlement strategy, or referral to tax/legal resources).

Finally, you receive clear recommendations: which debts to include, which to keep paying directly, what the estimated payment and timeline look like, and what trade-offs to expect (account closures, credit-report behavior, and program requirements). The goal is a plan that’s affordable from day one and realistic to complete without overpromising results.

Customized DMP strategy development

No two debt portfolios are the same, so the plan is built around your budget, accounts, and goals. We start by prioritizing which unsecured debts to include – focusing on balances where creditor concessions will meaningfully lower cost and speed repayment – while mapping alternatives for ineligible items (e.g., federal student loans, tax debts, or secured accounts).

Before enrollment, your counselor prepares for negotiations creditor by creditor, using historical participation patterns and your account details (balance, APR, delinquency, prior hardship notes) to model realistic terms and a sustainable monthly payment. We also plan the sequence: when to enroll each account, how to transition autopays and subscriptions, and how to prevent payment gaps during the first billing cycles.

For debts that won’t enter the DMP, we integrate the right path – creditor hardship plans, time-bound settlement strategies, or referrals to tax/legal specialists – so nothing is left unmanaged. Throughout, you’ll see the trade-offs clearly (account closures, credit-report behavior, emergency-fund targets) and get a step-by-step schedule that keeps the plan affordable and on track.

Your next steps: get a professional debt review

If you’re deciding whether a debt management program makes sense, the most useful next step is a confidential review with a certified credit counselor. You’ll go over your full budget and each account to determine which debts qualify for inclusion and which should be handled another way.

What you can expect from that review:

• A clear list of eligible unsecured debts for a DMP.
• An estimated monthly payment and timeline based on likely creditor concessions.
• Identification of non-DMP debts (e.g., federal student loans, taxes, secured accounts) with next-step options for each.
• A walkthrough of practical trade-offs (account closures, credit-report behavior) and how to set up emergency savings so the plan is sustainable.

Ready to get answers tailored to your situation? Call (844) 276-1544 or start the secure online assessment to schedule a no-obligation consultation with a certified counselor.