Completing Debt Management Plans


Xiao, J. J. & Wu, J.( 2008). Completing debt management plans in credit counseling: An application of the theory of planned behavior. Journal of Financial Counseling and Planning, 19 (2), 29-45.

Brief Description: Debt management plans offered by credit counseling agencies have the potential to benefit the consumers, the creditors, and the agencies involved. Although debtors are screened by the agencies for their likelihood of being successful, not all of the participants in debt management are able to complete the program. Researchers found that three factors related to the debt management plan: attitude (wise to complete it), perceived behavioral control (ease of completing the program) and satisfaction (relationship with the plan services) positively affected intention to complete the plan. Intention to complete the debt management plan and perceived behavioral control had positive affects on the actual plan completion (behavior).

Implications: Credit counseling agencies should monitor the clients’ intentions of completing their debt management plans and incorporate educational components that encourage and support those intentions. When designing or operating a debt managing program, it is important to be aware of clients’ satisfaction with, and expected ability to complete the plan. One aspect of that would be to make clear the benefits and positive consequences of following through on the debt management plan. Having positive intentions toward completion will strengthen a client’s ability to it.