Debt Settlement Debt Settlement vs Debt Management | Debt Settlement vs Debt Management |
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What’s the difference between each of these debt relief options?
Debt Settlement vs. Debt Management It’s a very unfortunate state of our country that so many of us are struggling with mounting debt, sinking deeper into the pit of despair everyday no matter how hard we try to get out. Everyone is trying to figure out what options they have. Therefore it’s important that everyone understands the difference between debt settlement programs versus debt management programs. Debt Settlement Programs The goal of the debt settlement program versus the debt management program is to help you reduce the amount of money that you owe and the length of time you will be making payments. This is achieved through a settlement negotiator. The negotiator is basically the go between you and each of your creditors as you work to settle unpaid balances or delinquent payments. In many debt settlement programs the clients are able to reduce the outstanding debt by a substantial amount. See Debt Settlement Process. Can I Use Debt Settlement Programs? Most everyone is eligible for these types of programs. You need to be in at least $5000-$10000 in debt before most companies will work with you. Most reliable debt settlement companies will work with you if you’re a few months behind on your payments (and even if youre’ not) and you can demonstrate real personal financial hardship, ie: you are having a hard time meeting monthly payments. Debt Management Programs Debt management programs are informal agreements between you and your creditor to help reduce monthly payments. Here is the difference between debt settlement programs and debt management programs: the debt management program is handled by an agency, where you send a check every month and they then take that amount of money and break it up and disperse it to your creditors based on the amount of money you owe each creditor. They don’t re-age your credit report for you, so you will still be shown as delinquent if you are in fact delinquent. You don’t have to deal with your creditors anymore, the debt management agency will do that for you. Can I Use Debt Management Programs? Debt management programs are ideal for people who are trying to reduce the amount of money that goes out every month to pay bills so that you are on a better foot financially. Debt management programs work really well for people who know that there is about to be a change in their financial status, like a medical issue or long term unemployment. The goal of the debt management company is to help you reduce the interest payments on your loans and credit cards as well as your monthly payments. They will also work with the creditors to help decrease the number of times that the creditor will call you. Credit Counseling is Debt Management If you’re enrolled in a debt management program, you are also assigned a debt counselor. The goal of the counselor is to help you get your debt under control as well as working with you on your settlement goals to make sure that you do not fall behind again. Most people are thankful for caller ID especially when they are behind on bills but at the same time feel that they are trapped because creditors continuously call when you don’t have an answer for them. The debt counselor will handle that for you. The best advice there is, do your research and interview many debt management companies as possible. There are a number of places on the net, but start with the recommended ones below. Do a thorough check of the company you decide to go with and make sure that they are reputable. Related Articles: |
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