Debt Management

Debt management is generally  a service provided by an financial ogranization that provide you information regarding debt services that includes credit counseling, debt settlment, and debt consolidation loans. Most of the people choose a Debt Management Plan that is administrated by a credit counseling firm.
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Well, sort of. Debt management is used loosely to describe usually either credit counseling or debt settlement services. There really aren't any "debt relief" companies that just give you information about all of the different services that are out there. These companies will offer, for example, debt settlement or credit counseling.

More specifically, as you mentioned, a Debt Management Plan (DMP) is used by credit counseling agencies for their clients who are attempting to get their interest rates reduced so they can pay off their debts faster.

Who is a good candidate for a debt management program?

People who are able to make more than the minimum payment consistently, have a fairly low debt amount (under $7,500) but are struggling with high interest rates are most likely the best candidates and would benefit most from debt management services.

So if I am behind on my monthly payments debt management would not be good? I thought I could get help here what is the deal?

It does not mean you can't get any help. Debt management specifically refers to credit counseling services. These agencies as previously mentioned try to reduce interest rates for their clients so they can pay the debt off faster. However, you must remain current on your monthly payments to complete such a program.

If you are behind on your payments and have a higher debt amount (over $10,000), you may want to consider debt settlement as an alternative to filing bankruptcy, which should be used as a last resort to find relief from your debts.

Debt settlement refers to the negotiation process between a debtor (or the company working on behalf of the debtor) and the creditor in an attempt to reduce the principle amount of debt owed and settle the debt for a percentage of the full balance.

Let me know if you have additional questions, or feel free to fill out a form on DestroyDebt.Com for a free consultation.

Wait why do you have to be current to do a debt management plan I am confused now?

In a debt management program, the client makes one monthly payment to the credit counseling agency. This agency then in turn disperses monthly payments to each of the owed creditors. If the person misses any of the payments, they can be removed from the debt management program and end up right back where they started- in debt and struggling with high interest rates.

 As a result, you must remain current for the entire time (these debt management programs typically last 5 years) to complete the DMP successfully.