To the debt ridden consumer, a debt management plan may seem like Manna from heaven. After all, subsequent to contending with the seemingly unceasing calls from credit card companies, debt collectors, and the daily mail barrage of dunning letters, there still is only so much money to go around. You could work 24 hours a day and often still not be able to please all of your bill collectors.

Many debtors believe that creditors do not believe them when they say they do not have the funds to pay and angrily they think that the creditor is thinking that the debtor is living high on the hog! Nothing could be further from the truth! Creditors know probably better than the actual consumer just how dire the straits are. Considering that the creditors have access to your credit history there is precious little that escapes their gaze. The real reason behind the endless phone calls and angry looking notices is simply a jockeying for position. They want to aggravate you. They don't care if you have a million other bills to pay, as long as you pay them.

If the creditor can get you to allocate the $100 you have for paying your credit cards to Visa rather than to MasterCard, then they have done their job, and likely made a hearty commission off of you as well. While the average consumer does not understand this reasoning, she or he does understand that these phone calls are quickly adding up to the stress and anxiety in the household. Looking for help everywhere, including on the 'Net, the consumer sooner or later stumbles over the debt management plan; on paper, these plans appear to be a stroke of luck! Consider that you can have all your bills rolled into one, your interest rates are cut, the late fees will no longer accumulate, and the phone calls will stop!

Unfortunately, there is a dirty little secrete behind the debt management plan that not many consumers are aware of: many of these plans are administered by credit counselling services that are funded by the very creditors from whom the debtors are looking for respite! Their advertising is easy enough – stop the phone calls, stop the harassment, pay off your debt, and move on with your life, all at no cost! Yet after some serious digging the consumer will find out that the debt management plan is indeed underwritten by the credit card company that has been harassing them at home and at work for the last two weeks. In essence, the debt management plan has become little more than another form of collection tool the creditors have found useful in dealing with debtors who are in over their heads. Adding insult to injury is the fact that a debtor's membership in such a debt management plan will be reported to the credit bureaus and as such will add to the demise of the consumer's credit rating, in fact doing precious little to help the debtor to climb out of debt unscathed.