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Credit counseling (known in the United Kingdom as debt counseling) is a process that involves offering education to consumers about how to avoid incurring debts that cannot be repaid through establishing an effective Debt Management Plan and Budget. Credit counseling is usually less typified by functions of credit education or the psychology of spending habits, rather credit counseling establishes a planned method of debt relief, typically through a Debt Management Plan.

Credit counseling often involves negotiating with creditors to establish a debt management plan (DMP) for a consumer. A DMP may help the debtor repay his or her debt by working out a repayment plan with the creditor. DMPs, set up by credit counselors, usually offer reduced payments, fees and interest rates to the client. Credit counselors refer to the terms dictated by the creditors to determine payments or interest reductions offered to consumers in a debt management plan.While private, for-profit debt/credit conseling exists also in European countries, frequently it is provided as a social service. Often their origin lies in either government, cunsumer associations or relief organizations.[1] Examples include the Money Advise and Budgeting Service (private, but publicly funded) in Ireland, ‘Poradna’ (private, consumer associations and sponsoring banks) in the Czech Republic, Caritas (private charity) in some parts of Italy, or the local governments in Finland.

These debt counselors provide services such as: a) administrative help in accessing benefits, raising awareness (and championing enforcement) of regulations and in correctly filling out forms to apply for bankruptcy or debt restructuring arrangements; b) mediation between debtor and creditor; c) immediate financial support; d) provide over-indebted citizens with a perspective to regain control over their financial situation, acting as a listening ear and a helping hand

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