What Take Charge America Does

Take Charge America is a nonprofit credit counseling organization that offers debt management plans (DMPs) as one way to handle multiple debts. A debt management plan is a structured repayment arrangement where the organization negotiates with your creditors on your behalf, typically to lower your interest rates or monthly payments, and then you make one monthly payment to Take Charge America instead of paying each creditor separately. This is different from a consolidation loan — you are not borrowing new money or combining debts into a single loan. Instead, you are reorganizing how you pay existing debts.

Take Charge America also provides financial counseling, budget planning, and educational resources. The organization operates in all 50 states and has been in operation since 1987. They charge a setup fee and a monthly service fee, both of which vary depending on your situation and state regulations. The fees are not hidden — they appear in your debt management plan agreement before you commit.

Key Takeaways

  • Take Charge America negotiates directly with your creditors to lower interest rates or monthly payments, then collects one payment from you each month.
  • This is a debt management plan, not a loan — you pay back what you actually owe, not borrowed money.
  • You will pay a setup fee (typically $0 to $50) and a monthly fee (typically $25 to $75), both disclosed before you enroll.
  • A debt management plan will appear on your credit report and may lower your credit score in the short term, but can improve it over time as you pay down balances.
  • The process typically takes 3 to 5 years to complete, depending on how much you owe and what interest rates your creditors agree to.

How the Enrollment Process Works

When you contact Take Charge America, you will first speak with a credit counselor who reviews your income, expenses, and debts. This conversation is free and does not commit you to anything. The counselor will ask about your monthly take-home pay, fixed expenses (rent, utilities, insurance), and all debts you are carrying — credit cards, medical bills, personal loans, and so on.

If a debt management plan seems like a reasonable fit, the counselor will show you a written proposal that lists each creditor, the proposed monthly payment, the negotiated interest rate (if one was agreed), and the total fees you will pay. You can review this proposal, ask questions, and decline if it does not work for your situation. If you move forward, you sign the agreement and set up your first payment.

Take Charge America then contacts your creditors to negotiate new terms. This negotiation can take 30 to 60 days. During this time, you may still receive calls or statements from creditors — the organization cannot stop those, but they can document your enrollment in a debt management plan if creditors call. Once creditors agree, your plan becomes active and you begin making monthly payments to Take Charge America, which distributes the money to your creditors according to the agreement.

What Happens to Your Credit During a Debt Management Plan

Enrolling in a debt management plan will show up on your credit report. Credit bureaus will note that you are in a DMP, and this notation can lower your credit score by 50 to 100 points in the first few months. The reason is that creditors see a DMP as a sign that you were struggling to pay on your own.

However, as you make on-time payments through the plan, your credit score typically begins to recover. After 12 to 24 months of consistent payments, many people see their scores improve because your overall debt is shrinking and you are demonstrating reliable repayment. By the time you finish the plan (usually 3 to 5 years), your score is often higher than it was when you enrolled, even accounting for the initial dip.

One important detail: creditors may close the accounts included in your plan. This means you cannot use those credit cards anymore, but it also means you are not adding new debt to those accounts. A closed account that you are paying on time still helps your credit score over time.

Fees and What You Actually Pay

Take Charge America charges two types of fees: a setup fee and a monthly service fee. The setup fee is typically between $0 and $50, depending on your state and the complexity of your plan. The monthly fee is usually between $25 and $75. Some states cap these fees by law, so what you pay depends partly on where you live.

These fees come out of your monthly payment to Take Charge America. For example, if your total monthly payment is $500 and your monthly fee is $40, then $40 goes to Take Charge America and $460 goes to your creditors. This means your monthly payment to the organization is higher than what your creditors actually receive, but it is all disclosed in your written agreement before you enroll.

You should compare these fees against the interest you would pay if you continued making minimum payments on your own. If Take Charge America negotiates your interest rates down from 22% to 8%, the savings in interest over three years will almost certainly exceed the fees you pay. A counselor can show you this math in your initial consultation.

How Take Charge America Differs From a Consolidation Loan

A consolidation loan is a new loan you take out to pay off existing debts in one lump sum. You then owe the consolidation lender instead of your original creditors. A debt management plan through Take Charge America is not a loan — you are still paying your original creditors, just on renegotiated terms and through a single payment to the organization.

The key difference is that with a consolidation loan, you need to may have access to based on your credit score and income. With a debt management plan, Take Charge America works with you based on what you can actually afford, regardless of your credit score. However, a consolidation loan is a single transaction that happens quickly, while a debt management plan is a multi-year commitment that requires discipline and consistent monthly payments.

If you have fair or poor credit and cannot may have access to for a consolidation loan, a debt management plan may be your more realistic option. If you have good credit and can may have access to for a loan with a lower interest rate than your current debts, a consolidation loan might save you more money overall. The choice depends on your credit profile, the interest rates available to you, and how much you can afford to pay each month.

What Happens If You Miss a Payment or Want to Exit

If you miss a payment to Take Charge America, the organization will typically contact you to reschedule or catch up. Missing payments can cause creditors to withdraw from the plan, which means they stop accepting the negotiated terms and may resume collection activity or charge-off proceedings. This is why consistency matters — a debt management plan only works if you make your monthly payment reliably.

If you need to exit the plan before it is finished, you can do so, but understand that creditors are no longer bound by the negotiated terms once you leave. They may revert to the original interest rates, resume collection calls, or pursue other collection actions. Some people exit early if their financial situation improves and they can pay off debts faster on their own, or if they find a consolidation loan they may have access to for. Take Charge America will not penalize you for leaving, but your creditors may.

When a Debt Management Plan Makes Sense

A debt management plan through Take Charge America works best if you have multiple unsecured debts (credit cards, medical bills, personal loans) that you cannot pay off quickly on your own, but you do have enough monthly income to afford a structured repayment plan. It also works well if you want to avoid bankruptcy and are willing to commit to 3 to 5 years of disciplined payments.

A debt management plan is less suitable if you have only one or two debts, if your debts are very small, or if you expect a significant change in income soon (like a job loss or major expense). It is also not the right choice if you cannot commit to making the same payment every month for years, or if you need to keep using credit cards during the repayment period.

Frequently Asked Questions

Will Take Charge America hurt my credit score?

Yes, initially. Your score will likely drop 50 to 100 points when you enroll because the plan appears on your credit report. However, as you make on-time payments and your debt balances shrink, your score typically recovers and often ends up higher than before you enrolled. The timeline is usually 12 to 24 months to see improvement.

Can I use my credit cards while in a debt management plan?

Creditors often close the accounts included in your plan, so you cannot use those cards. You can still use other credit cards not in the plan, but most counselors recommend avoiding new credit during the repayment period. Adding new debt defeats the purpose of the plan and makes it harder to finish on schedule.

What if a creditor refuses to negotiate?

Some creditors will not agree to lower interest rates or accept a debt management plan. If that happens, Take Charge America will typically keep that debt in your plan at the original terms, or you can pay it separately on your own. The organization cannot force a creditor to negotiate, but most major credit card companies and banks do participate in DMPs.

How long does it take to pay off debt through Take Charge America?

Most debt management plans run 3 to 5 years, depending on how much you owe and what interest rates your creditors agree to. The organization will show you the projected payoff date in your written agreement before you enroll. Paying consistently each month keeps you on track; missing payments can extend the timeline.

Is Take Charge America a scam?

No. Take Charge America is a nonprofit certified by the National Foundation for Credit Counseling (NFCC) and the Financial Counseling Association of America (FCAA). It is regulated by state attorneys general and the Federal Trade Commission. However, you should always review your written agreement carefully and understand all fees before enrolling in any debt management plan.