"Is the Free Debt Management Program You Are in a Scam?"

No. The debt management plan (DMP) I am in now is not a scam. It's a legitimate debt relief program offered by a credit counseling and debt management agency, also known as AKPK, in Malaysia.

The agency is set up by the Central Bank of Malaysia in year 2006 to provide free money management, credit counseling, education and loan restructuring services such as debt repayment plans to debt-ridden people who need help in managing their personal debts.

As such, it's a free debt management program available in Malaysia; there is neither setup fee nor monthly service fee involved.

If I am not mistaken, there isn't any free debt management program in the US, right?

According to what I have read at the Federal Trade Commissions (FTC), the credit counseling organizations are divided into two main types, namely, non-profit and for-profit.

Non-profit organizations provide charitable services with free-of-charge advice while for-profit and companies provide services with a certain amount of fee.

If you have come to a point that you could no longer manage your piling debt and you are thinking of getting help from a credit counseling agency, make sure you compare a few nonprofit organizations and check their non-profit status with the Better Business Bureau, as well as membership in trade associations such as the NFCC (National Foundation for Credit Counseling) and AICCCA (Association of Independent Consumer Credit Counseling Agencies).

Just because the credit counseling organizations say they are "nonprofit", there’s no guarantee that their services are truly free. Some claim to be non-profit while they are actually for-profit companies.

In fact, the Federal Trade Commissions has in the past years sued more than dozen debt relief companies that have scammed people into paying high up-front fees, outrageous hidden fees, enrollment fees or "voluntary contributions."

Also check if there have been complaints lodged against your preferred non-profit credit counseling organizations. There are many unscrupulous agencies out there that will take your money and tell you blatant lies, claiming they are making payments to your creditors while in truth they are pocketing your money.

If you fall for their pitch, you could lose hundreds of dollars in fees and find yourself in even worse financial shape.

Steer clear away from credit counseling agencies that suggest you stop making payments to your creditors while they are doing the negotiation on behalf of you and pay to them instead. You should always go on making payments to your creditors even if you cannot pay the full amount of all your credit card and loan payments.

When promises sound too good to be true, they may be false promises. When you hear that it's guaranteed that your debt can be erased and your credit score can be improved, run in the other direction.

You must be clear with the fees you are going to be charged before you enroll in a debt management plan. If they say there are no fees or just a small fee involved, or they don’t mention fees at all, you had better walk away.

Run away too if the credit counselor rushes you into signing up a debt management plan in less than 20 minutes' counseling session. A professional credit counselor should spend at least 30 minutes with you in order to provide you with an income and expense assessment to determine what kind or amount of payment you can make per month, or whether a debt management program is right for you.