Why do debt management programs have a high rate of dropouts?

Having been in a DMP myself, I can tell you that the payments become impossible to keep paying if you have an unexpected expense, crisis, hours cut, etc. etc. While they negotiate a lower interest rate, you are still piling up interest charges. With some credit card companies, if you miss one payment, they cancel the agreement and your interest rate reverts back to what it was when you entered the program.

I paid on my DMP for 2.5 years, but then got myself in "hot water" by taking out payday loans to pay for the DMP payment. (What WAS I thinking??) Then I got hit with back taxes from IRS because I had 2 jobs, then my youngest daughter (who's bipolar) faced eviction, needed car repairs.....and so on. So you can see how difficult it is unless you have an ample supply of $$$.

After I took care of my payday loans, got an installment agreement with IRS so they wouldn't garnish wages, rescued my daughter, I decided to settle my credit card debt. I've settled with HSBC (just paid off) and Citibank. I have to renegotiate with Bank of America because they never sent me settlement letter, and I won't give them $$$ without one.

So that's my story on DMP.

Yeah, its true that if the interest rates are not fixed, you would keep accumulating on interest even during the DMP. Hence, if you are considering to join in a debt management program, make sure that your counsellor negotiates to freeze the interest rate for you.