Debt Relief That Doesn’t Wreck Your Credit

Debt Settlement vs. Debt Management Plans: Know the Real Difference

Feeling overwhelmed by debt? You’re not alone—and you’re not out of options. If you’ve been Googling “get out of debt fast,” you’ve probably stumbled across debt settlement plans that promise quick fixes. But here’s the kicker: those “fixes” can wreck your credit, rack up fees, and leave you worse off than before.

There’s a better path—and it actually works. At Fort Worth City Credit Union, we partner with GreenPath Financial Wellness to offer debt management plans that are realistic, reputable, and built around you. No gimmicks, just guidance that helps you pay down debt, protect your credit, and finally breathe easier. Read on to learn how debt management stacks up against debt settlement—and why working with GreenPath could be the smartest financial move you make this year.

What Is a Debt Settlement Plan?

Debt settlement is typically offered by for-profit companies that negotiate with your creditors to accept less than what you owe. Sounds good, right? Not so fast.

The Catch with Debt Settlement:

• You usually have to stop paying your creditors while the settlement company negotiates. That can lead to late fees, penalties, and major credit damage.

• There’s no guarantee creditors will accept the offer.

• You may still owe taxes on the forgiven amount, because the IRS could consider it taxable income.

• And yes, you’ll probably pay hefty fees to the settlement company, even if the plan doesn’t work.

Bottom line: While it may sound like a shortcut, debt settlement can quickly spiral into a more expensive and damaging detour.

What Is a Debt Management Plan (DMP)?

A debt management plan is a structured repayment plan where you work with a nonprofit credit counseling agency—like GreenPath—to consolidate your unsecured debt (like credit cards) into a single, more manageable monthly payment.

Unlike settlement companies, GreenPath doesn’t make promises it can’t keep. Instead, their certified counselors help you create a custom plan based on your budget, often negotiating:

• Lower interest rates

• Waived fees

• And a clear payoff timeline (usually 3 to 5 years)

No gimmicks. No credit score freefall. Just real help from real people.

Why Debt Management Plans Are the Better Option

Let’s compare:

Feature	Debt Settlement	Debt Management Plan
Creditor Negotiation	May involve aggressive offers with no guarantees	Works cooperatively with creditors to reduce rates and fees
Impact on Credit Score	Often causes significant damage	May improve over time with consistent payments
Payment Structure	Irregular or delayed payments	Single, fixed monthly payment
Debt Forgiveness Taxes	Forgiven debt may be taxable	Typically not applicable
Fees	High service fees, often upfront	Low or no fees through nonprofit partners
Creditor Harassment	May continue during negotiation	Often stops once enrolled in plan
Support System	For-profit company with limited follow-up	Ongoing support from certified counselors

DMPs work with your creditors, not against them—helping you maintain your dignity, protect your credit, and steadily pay down what you owe.

How Fort Worth City Credit Union and GreenPath Can Help

We believe our members deserve trustworthy support, especially when navigating financial challenges. That’s why Fort Worth City Credit Union partners with GreenPath Financial Wellness, a nonprofit that has helped millions of people regain control of their finances.

Through our partnership, you can:

• Speak to a certified counselor at no cost

• Explore your personalized repayment options

• Enroll in a Debt Management Plan if it’s right for you

• Get support with budgeting, credit, and long-term financial health

No sales pitch. No judgment. Just guidance.

Ready to Take the First Step?

If debt has you feeling overwhelmed, you don’t have to face it alone. Fort Worth City Credit Union and GreenPath are here to walk with you—step by step—toward a debt-free future.

Start your free financial counseling session with GreenPath today

Or give us a call—we’re always here to help our members make informed, empowered financial choices.