The DIY Debt Management Program: A Template for Debt Relief

Home » Credit Card Debt Relief » Debt Management » The DIY Debt Management Program: A Template for Debt Relief

Are you a “Do-It-Yourself” person when it comes to broken windows or leaky faucets?

How about credit repairs?

Yes, fixing your finances could be as much of a DIY project as tackling window and faucet problems.

One of the most popular and effective ways to deal with credit card bills, medical bills, and other unsecured debt is to contact a nonprofit credit counseling agency and apply for a structured debt management program.

But if you’re a do-it-yourself kind of person and want to tackle it on your own, a DIY debt management plan may be right for you.

Unsecured loans generally have much higher interest and revolving credit – it becomes a cycle that seems like it will never end. But you can end it with some hard work and a proven strategy.

This page will walk you through how to manage your debt, providing a template for a do-it-yourself debt management strategy.

Can I Set up a Debt Management Program by Myself?

Yes, you can. You’ll have to take a deep dive into your spending habits, budget, and what you owe. It also involves calling your creditors and requesting reductions in credit card interest rates and fees. That may seem daunting, but many banks are willing to work with individuals and will take your call.

“Chase is committed to providing customers who are experiencing financial hardships with the right solutions based on their individual situation,” said Chase Bank media relations officer Lauren Francis. “We encourage customers to call us to discuss options that may be available to them including but not limited to payment arrangements, payment programs, and debt settlements.”

Nessa Feddis, deputy chief counsel for the American Banker Association said, “Each bank has a different policy and each case has to be considered on an individual basis, but customers might get a better answer if they go directly to a bank. It might depend on what kind of history they’ve had with the bank and the situation they’re in.”

She said that if their credit issues are an aberration because they lost a job or just went through a divorce, the bank might take that into account. “It’s also a positive if you have a checking account, or have taken out a car or home loan,” she said. “These are things that might work in their favor as far as getting a positive resolution.”

Banks are also aware that some people can’t do it on their own.

“But at times, we will suggest that customers meet with a reputable credit counseling agency if their financial situation exceeds their ability to pay,” Feddis said.

How to Set up a Debt Management Program

There are specific steps to a debt management plan that all must be followed with care to make it work:

  • Create a spreadsheet
  • Determine a debt management strategy
  • Negotiate lower interest rates
  • Limit expenses
  • Track your progress and monitor your credit report

Nothing about reducing debt is easy, but, if you follow these steps and stick to it, your plan will be effective.

Step 1: Create a Plan Using a Debt Reduction Spreadsheet

Keeping track of payments and balances is important, so download the free InCharge debt reduction spreadsheet, which will help you calculate your repayments and keep track after you input your balances, interest and payments.

» Download: Debt Reduction Spreadsheet

Organize unsecured debts by name, balance due, interest rate, monthly payment and due date. If you don’t know who you owe, get a copy of your credit report from

In another area of the spreadsheet, organize monthly expenses that need to be paid first, such as rent, utilities, food, car payment, student loan payment, childcare — all your necessary bills.

List all sources of monthly income. Then subtract monthly expenses from monthly income.

What is left is how much you have available in discretionary income to pay off debt.

Step 2: Debt Management Strategies

The two most common methods to pay off debt are “debt snowball” and “debt stacking,” which we like to call “debt wrecking ball.” The difference is in what you pay off first.

  • Debt Snowball: The debt snowball method was made famous by finance guru Dave Ramsey. To start, you pay off the card with the lowest balance first, and work your way up to the highest, regardless of interest rate.
  • Debt Wrecking Ball: Also known as debt stacking, or debt avalanche, pay off debts with the highest interest rate first, working down to lowest rate.

With both approaches you make minimum payments on your other balances while aiming a larger payment at one balance.

With the snowball method, you’ll see some immediate success, which builds momentum and confidence. But while the small debt is being paid off, larger debt is expanding because of interest.

The wrecking ball method may feel slow, but it will cost you less money in the long run.

It’s important to keep track of what you’re paying and how quickly debt is being reduced.

Step 3: Negotiate Your Interest Rates

You can’t automatically erase your debt, but you can reduce interest and fees, which will make your payments work harder for you. As mentioned before, a key part of the do-it-yourself debt management strategy is to call the card companies and negotiate lower interest rates.

Many people find this difficult to do, but keep in mind that you’re advocating for yourself and lowering your debt.

It’s important to do your homework before you call, including knowing what you’re paying both in interest and monthly payments. Some other tips are:

  • Check the mail for competing card companies offering lower interest. Cite those offers in your negotiation.
  • Write down your talking points, or even a script, before calling and have them ready while you’re on the call. Things to note are your credit score, payment history, your overall history with the company and competing offers.
  • If the first person you talk with says they can’t help, ask to talk to someone who can.
  • Always be polite and non-accusatory during the discussion. If they won’t lower the rate, don’t argue, but politely ask why so you can work on the negatives.

Step 4: Limit Expenses

The best thing you can do is to put away your credit cards, otherwise you’ll be back where you started and your plan won’t work.

In a traditional debt management program, you’d be required to stop using all your credit cards. To make your DIY debt management plan work, you must do the same thing. So, close all your credit cards.

Don’t apply for any new cards or acquire new debt until all your cards are paid off. Get a budgeting app for your phone or tablet to help stay on track.

Step 5: Track Your Progress and Monitor Your Credit

Track progress on your spreadsheet and keep an eye on your credit report to monitor the positive impact your hard work is having. You can check your credit report for free once every 12 months with each of the three credit-reporting agencies: Experian, Transunion and Equifax.

You can also use free offers from several credit-related websites to track your credit score progress.

Debt Management Plan Example

You may wonder how all the numbers come together to form a do-it-yourself debt management plan. Let’s walk through an example, using a fictional consumer we’ll call Beth.

Traditional debt management plans usually take 3-5 years, and a do-it-yourself plan should have a finish line, too. After going through her budget and finances, Beth determined she could pay off her $12,000 in credit card debt in five years, which means 60 monthly payments.

If she were just paying the principal, that would mean a $200 a month payment. But, of course, interest payments have to be included, too.

Beth’s hypothetical credit cards are with Bank of America, with a balance of $3,500. The principal over 60 monthly payments is $58.33 ($3,500 divided by 60). She originally had a 22.5% interest rate, but she negotiated it down to 9.99%.

The balance of $3,500 multiplied by the new interest rate (.09), is $315. Divided by 12 (for 12 months, because it’s annual interest), is $26.25. Add the principal and the interest payment together: $58.33 + 26.25 = $84.58.

That’s Beth’s monthly payment on that one card, just a little more than a quarter of her debt. Imagine if the interest were still 22.5%! No wonder it’s so hard to pay down credit card debt.

Beth repeated the exercise with her three other cards, and figured out a monthly payment that fit with her budget. She had to fiddle with different time frames to do it, and came up with the five-year goal as one she could afford.

The interest payment will decrease each month as the balance gets smaller, but Beth decided, rather than reducing the payments as the interest payment decreased, she’d keep paying a set amount. Doing that made the balance melt away as the interest declined.
It may seem like a lot of tough math, but it’s worth the effort to build a budget that works.

Compare Your Debt Management Program with Nonprofit Debt Management

Once you’ve worked out your payment schedule, contact a nonprofit credit counseling agency. Ask if you could enroll in their debt management program, and get an estimate for a consolidated monthly payment.

How does it compare with what you negotiated on your own?

If your payments are higher than the estimate, that may mean you didn’t get the same interest rate concessions the credit counseling agency received. It might make financial sense for you to pay for a nonprofit agency to administer your debt management program.

If your payments are lower, congratulations! You did the work yourself and saved some money that can be applied toward paying off your debt even faster.

You may also decide you’d rather have someone else tackle the math and budgeting. A nonprofit credit management agency, like InCharge Debt Solutions, administers the program, works with creditors to consolidate your payments and create a monthly payment plan that you can afford.

Do-It-Yourself Debt Management: Pros and Cons

It’s up to you to decide what works for you. DIY debt management plan may be great for some people, but not be a good option for others, depending on spending habits, financial obligations, credit history and level of commitment.

Some of the pros are:

  • You’ll learn more about your spending habits, which is a good thing. Some of it may be eye-opening.
  • You can save a lot of money if you successfully negotiate with the lenders to reduce interest rates and eliminate fees.
  • Creditors and debt collection agencies eventually stop calling you once you start making regular payments.
  • As you are making consistent monthly payments and your debt is being reduced, your credit score should improve.
  • You will feel relief of knowing that dark cloud of debt that’s always hovering over you, is blowing away.

But there are also considerable cons.

  • You’re on your own — you won’t receive the free credit counseling and budgeting help offered by a nonprofit credit counseling agency.
  • It will take a lot of work to deal with the creditors, as well as to teach yourself about resources and keep track of things.
  • You will have to create a budget that takes care of necessities, but leaves room for an affordable monthly payment to eliminate your debt.
  • You must stay on task for the 3-5 years it will take to complete the process.

Traditional Debt Management: Pros and Cons

If a DIY debt management plan doesn’t seem like a good fit, you may want to consider credit counseling, which could lead to a traditional plan.

After going over your finances, you may also feel your situation is too difficult to tackle on your own, or you’re too deep in debt to make it work. You may have tried negotiating with credit card companies, but you weren’t successful.

Creditors agree to lower interest rates for credit counseling organizations like InCharge. That allows InCharge to consolidate your payments, and create a monthly payment plan that you can afford. It does all the things the DIY program does, only InCharge administers the program, takes your one payment each month and distributes it to your creditors in agreed upon amounts.

Credit score is not a factor in joining a debt management program, so even if you have bad credit, you can still take advantage of this debt-relief option. There’s usually a small monthly administrative fee, but otherwise it costs as little as DIY.

A traditional plan also has account management software so you can track all your payments, balances and interest. There is someone available to call for help when you have issues with your statements or creditors and provide education on budgeting, saving money and being an informed consumer.

There are drawbacks. If you miss a payment, you may lose whatever concessions card companies have made; you must stop using all your credit cards; and finally, smaller banks, some department store and gas station card companies don’t always agree to debt management programs.

Tips to Pay Off Your Debt with a DIY Debt Management Plan

As mentioned before, paying off debt isn’t easy, even when you follow the plan, use a spreadsheet and stick to a budget.

Some tips that can make it easier and help you stay motivated:

  • Set up auto pay with creditors, so the money automatically comes out of your account every month.
  • Make extra payments when you can afford it.
  • Choose payment due dates to better fit when you get paid
  • Join support groups online, like Debtors Anonymous or Spenders Anonymous,
  • Set up a goal to reward yourself with when an account is paid off.

Just don’t make it an expensive one that will put you back into debt.

About The Author

Tom Jackson

Tom Jackson focuses on writing about debt solutions for consumers struggling to make ends meet. His background includes time as a columnist for newspapers in Washington D.C., Tampa and Sacramento, Calif., where he reported and commented on everything from city and state budgets to the marketing of local businesses and how the business of professional sports impacts a city. Along the way, he has racked up state and national awards for writing, editing and design. Tom’s blogging on the 2016 election won a pair of top honors from the Florida Press Club. A University of Florida alumnus, St. Louis Cardinals fan and eager-if-haphazard golfer, Tom splits time between Tampa and Cashiers, N.C., with his wife of 40 years, college-age son, and Spencer, a yappy Shetland sheepdog.


  1. Dantus, C. (2019, July 6) How to reduce your debt. Retrieved from
  2. N.A. (ND) Coping with Debt. Retrieved from
  3. N.A. (ND) Monitoring Your Credit Score and Credit Report. Retrieved from
  4. N.A. (ND) Annual Credit Retrieved from
  5. Woroch, A. (2017, December 20) 12 Mind Tricks to Psych Yourself Out of Debt. Retrieved from