Joining established debt management services, most creditors extend the terms of your debts at a reduced or eliminated interest rate with no late fees. These debt management services do this without further adverse affect to your credit history. More considerably, creditors recognise that people that enter into debt management services are making a good faith effort to repay their loan obligations.

Therefore, creditors are more willing to work with clients by extending favorable terms to avoid the expense of turning these accounts over to a collection agency or not receiving any money at all if the account holder's debt is released through bankruptcy. The creditors do require that all revolving accounts entered into the debt management services are closed to prevent further spending. However, the consumer may choose which accounts they want to include or keep out of debt management services.

Under the debt management services, borrowers try to bargain with all of their creditors to obtain the lowest monthly of their creditors to obtain lowest obligation needed to satisfy all of their current accounts. In this endeavour, a debt counsellor assesses your financial situation, and assists in creating a spending plan and negotiates the terms of your debts with creditors. These terms such as lower interest rates and waived late fees can often provide you with more affordable payments and shorter payoff period.

Being able to save money is, or should be, an important factor in deciding whether to take out debt management services. Typically, people who are considering for debt management services will have multiple debts which include one or more with high interest rates. This particularly happens when loans are taken out during a period when market interest rates are high. The borrower sees cheaper loans advertised when the market rates decline, but the rates of his loans are fixed at a high level; it is therefore an immediate temptation to switch to one cheaper rate loan and to make interest charges and monthly payments cheaper under the debt management services.