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What Are the Benefits of a Financial Debt Management Program Over Settlement?

I’ve often stated that debt settlement is meant as a bankruptcy alternative and many people are not in a situation that warrants the drawbacks it can involve. A financial debt management program is a solution that people should consider if they need modest, not severe, help.

It’s all about how unaffordable your current monthly unsecured debt payments are in relation to your income. As I explain in this video, if your monthly credit card bills are a lot more than you can reasonably afford you are likely beyond the ability to benefit from the help of financial debt management.

Why?

Because you are probably paying the minimum payments each month and you are not able to pay off any of the principle balance. This is a recipie for disaster and your debt will continue to balloon due to the high interest rates. It’s like being on a treadmill you can never get off of…you go nowhere and make no progress. So you will need a big payment reduction to get ahead and that comes from debt settlement.

But what if you are still on top of paying down your balance each month but it is getting harder and you want to be proactive to avoid escalating financial hardship?

Then look into a financial debt management program. Here are it’s benefits over debt settlement:

1. Your credit score does not suffer nearly as much because you will eventually pay off everything you owe just with reduced interest rates

2. Debt management companies do not have an adversarial relationship with credit card companies so the process can go more smoothly

3. Many services that provide debt management plans are non profit debt relief agencies so they are required to provide financial counseling, education, and budgeting assistance in addition to managing your consolidated monthly payments

4. Their fees are typically lower