Managing consumer debt: Culture, compliance, and completion

We examine the cultural dimensions of participation in a debt management program (DMP). Archival data from Consumer Credit Counseling Service provide insights into the behavior of consumers in a DMP. Latino clients differ from Anglo clients, and are ultimately less successful in resolving debt problems. A key difference appears to be the expected monthly payment established for clients. While only debt level determines Latinos' expected payment, Anglos appear to better negotiate an expected payment from creditors, increasing their success. Importantly, homophily increases compliance for Latino debtor-counselor dyads. Overall, this study contributes to the transformative service research (TSR) literature by suggesting ways culture influences adherence to and completion of a DMP, leading to financial freedom for consumers in distress.