If you hear or read the phrase Debt Management in conjunction with getting out of debt, it can mean a myriad of things. It is such a generic term that to really understand what someone is talking about you’ll need to start asking questions.
Debt Management Equals Credit Counseling
A non-profit credit counseling program has a product they sell called a Debt Management Plan (DMP). Sometimes the shorter phrase Debt Management is used to describe a DMP.
A DMP is where the consumer makes one payment to the credit counseling program each month and that is in turn chopped up into smaller payments and sent to the client’s creditors. While one payment is made, it’s not really a true consolidation.
Debt Management May Equal Debt Settlement
Debt settlement programs get called a number of names like credit card modification, debt validation, debt modification, debt adjusting, and debt management.
The phrase debt management is so generic that it can mean almost anything and it gets used that way sometimes.
Debt Management is Really Just Managing Your Debt
If someone tries to sell you a debt management solution for your debt situation, start asking questions. In fact here are some of the questions you should ask.
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People in debt do want to manage their debt. They want to make it go away so they often hire a company to help manage their debt and resolve it.
There is almost no good debt management solution that is a magic wand and comes without complications in one way or another. At the end of the day only the consumer can find the right debt management solution to meet their needs.
So the best place to start to understand if “Debt Management” is right for you is to look at the larger and most logical solutions to deal with debt. You can do that by looking at my Get Out of Debt Calculator.
As you will see in the calculator, all sorts of solution to manage your debt are compared and from that data you can begin your search to the debt management solutions that makes the most sense for you and your current situation.